Which of the Following Is Not a Feature of Sweezy

question 12

Multiple Choice

Which of the following is not a feature of Sweezy oligopoly?

• A)There are two firms in the market serving many consumers.
• B)The firms produce homogenous products.
• C)Each firm believes that rivals will cut their prices in response to a price reduction, but will not raise their prices in response to a price increase.
• D)Barriers to entry exist.

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Definitions:

Profits

The financial gain made in a transaction or operation, calculated as the difference between revenue and costs.

Marginal Cost

The cost of producing one additional unit of a good or service, crucial for decision-making on output levels.

Marginal Revenue

The boost in income achieved by selling an additional unit of a good or service.

Monopolies

Monopolies exist when a single company or entity has exclusive control over a particular market or industry, potentially leading to higher prices and lower-quality products or services due to lack of competition.