Why Is It More Difficult for an Oligopoly to Apply

question 264

Multiple Choice

Why is it more difficult for an oligopoly to apply the profit-maximization rule than firms in other market structures?

• A) The oligopoly has more rival firms than exist in other market structures.
• B) MR is higher than price for an oligopoly.
• C) The oligopoly's demand curve depends on the decisions of rival firms in the market.
• D) Rival firms in the market will always match price decreases, making it easy to predict the firm's demand.

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Definitions:

Probability

A measure of the likelihood that an event will occur, expressed on a scale from 0 (impossible) to 1 (certain).

Statistic

A numerical value derived from a sample that represents a feature of the population from which it was drawn.

Research Hypotheses

Research hypotheses are statements made by researchers that propose a relationship or difference between variables, to be tested through experimental or observational study.

Statistical Hypotheses

Statements made about the relationships between variables, specifically in terms of whether a statistical relationship exists in the population that can be tested.