Because Each Oligopolist Cares About Its Own Profit Rather Than

question 19

Multiple Choice

Because each oligopolist cares about its own profit rather than the collective profit of all the oligopolists together,

• A)they are unable to maintain the same degree of monopoly power enjoyed by a monopolist.
• B)each firm's profit always ends up being zero.
• C)society is worse off as a result.
• D)Both a and c are correct.

Describe the methodologies and findings of tests for market efficiency, including the performance of professional managers and investment strategies.

Distinguish between conventional utility theory and prospect theory regarding the shape of utility functions and their implications for investor behavior.

Recognize the role of various market sentiment indicators and their implications for predicting market movements.

Appreciate the relevance of behavioral explanations, such as overconfidence and representativeness, for understanding market anomalies and momentum.

---

Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that do not vary with the level of production.

Predetermined Overhead Rate

This rate is used to allocate manufacturing overhead to individual units produced, based on a predetermined formula.

Direct Labor Budget

Direct labor budget is a financial plan that estimates the cost of direct labor required to meet production goals, detailing the amount and cost of the labor necessary for a specific period.

Labor-Hours Per Unit

Labor-hours per unit measures the amount of labor time required to produce one unit of a product.