When Each Company Follows Its Dominant Strategy the Profits for Each

question 72

Multiple Choice

When each company follows its dominant strategy the profits for each of the firms are equal to:

• A)$2,499
• B)$2,500
• C)$2,000
• D)$4,998

---

Definitions:

Marginal Cost

The escalation in cumulative costs incurred from creating an additional unit of a good or service.

Competitive Supply Curve

A graphical representation showing the quantities of a good or service that a firm is willing to supply at different prices in a competitive market.

Dominant Firm

A firm that has a large share of the total sales in a particular market, giving it significant control over the market.

Copper Cartel

An agreement among copper-producing countries or companies to control copper prices and production, often to maintain high prices.