While There Is No Specific Number of Firms That Must

question 31

Multiple Choice

While there is no specific number of firms that must dominate an industry before it is an oligopoly, the number of sellers characterizes an oligopoly when

• A) there are more firms than a monopolistically competitive market.
• B) there is a sufficient number of firms to satisfy the market demand.
• C) the firms are so large relative to the total market that they can affect the market price.
• D) the firms are so small relative to the total market that they cannot affect the market price.

---

Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, influenced by the proportion of fixed costs in total costs.

Net Operating Income

Income produced by a firm's regular activities, not including taxes and interest.

Sales Increase

The rise in the quantity or volume of products sold or revenue generated over a specific period.

Variable Expenses

Costs that vary in direct proportion to changes in the level of production or sales volume, such as materials or sales commissions.