Two Characteristics of Oligopoly Pricing That Have Frequently Been Observed

question 216

Multiple Choice

Two characteristics of oligopoly pricing that have frequently been observed are that

• A) oligopolistic prices tend to be "sticky" or inflexible, and when the firms do change their prices, they tend to do so together.
• B) oligopolistic firms' prices tend to fluctuate a lot, and these prices tend to move together with each other.
• C) oligopolists tend to practice a lot of price discrimination, and there tends to be a wide variance in oligopoly pricing.
• D) oligopolistic firms' prices tend to fluctuate a lot, and there tends to be a wide variance in oligopoly pricing.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.

Consumer Surplus

The divergence between the aggregate amount consumers are willing and have the means to pay for a good or service, and what they truly pay.

Producer Surplus

The disparity between what sellers are ready to take for a product or service and the actual amount they get.

Minimum Imposed Price

A price floor set by the government or other regulatory body, above the equilibrium price, to prevent prices from falling too low.