If the Number of Suppliers in the Microcomputer Industry Increases

question 51

Multiple Choice

If the number of suppliers in the microcomputer industry increases, what would we expect to happen?

• A)The number of microcomputers sold will fall.
• B)The price of microcomputers will rise.
• C)The supply curve will shift left.
• D)Movement along the demand curve will occur.

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Definitions:

Oligopoly

A market structure characterized by a small number of firms controlling a large portion of the market, potentially leading to limited competition and higher prices for consumers.

Market Demand Curve

A graphical representation showing the relationship between the price of a good and the total quantity of the good that all consumers in the market are willing to purchase at that price.

Profit-maximizing Output

The point of production where a company attains its maximum profit, occurring when marginal revenue is equal to marginal cost.

Tacit Collusion

Collusion occurs when price- and quantity-fixing agreements among producers are explicit. Tacit collusion occurs when such agreements are implicit.