Which of the Following Is True

question 8

Multiple Choice

Which of the following is true?

• A) In Bertrand oligopoly each firm believes that its rivals will hold their output constant if it changes its output.
• B) In Cournot oligopoly firms produce an identical product at a constant marginal cost and engage in price competition.
• C) In oligopoly a change in marginal cost never has an effect on output or price.
• D) None of the preceding answers is correct.

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Definitions:

Total Revenue

The total amount of money received by a company from the sale of its goods or services before any expenses are subtracted.

Total Variable Cost

The total expense that changes in proportion to changes in the volume of output or production.

AVC

Average Variable Cost, which is the total variable costs of production divided by the quantity of output produced.

ATC

Stands for Average Total Cost, a metric that represents the per-unit total cost of production, including both fixed and variable costs.