If the Price in an Oligopoly Market Is the Same

question 216

Multiple Choice

If the price in an oligopoly market is the same as that of a monopoly with identical cost and demand conditions then

• A) the average cost curve must be downward sloping.
• B) there may be collusion between firms.
• C) market demand must be unit elastic.
• D) This could never happen.

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Definitions:

Output

Output usually refers to the total amount of goods and services produced by a company, industry, or economy within a specific period.

Total Revenue

The full amount of income generated by the sale of goods or services by a company before any costs or expenses are subtracted.

ATC

Average Total Cost, which is calculated by dividing the total cost of production by the quantity of output produced. It includes both fixed and variable costs.

MC

Marginal Cost, which refers to the increase or decrease in the total cost of production when the output is adjusted by one additional unit.