If the Profit-Maximizing Markup Factor in a Six-Firm Cournot Oligopoly

question 62

Multiple Choice

If the profit-maximizing markup factor in a six-firm Cournot oligopoly is 3,what is the corresponding market elasticity of demand?

• A) −0.25
• B) −1.25
• C) 0.08
• D) None of the answers are correct.

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Definitions:

Break-Even

is a financial term indicating the point at which costs or expenses and revenue are equal, resulting in no net loss or gain.

Total Revenue

The entire amount of income generated by the sale of goods or services before any deductions are made.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, essential for budgeting and financial planning.

Variable Cost

Costs that vary directly with the level of production or service provision, such as materials and labor.