If an Oligopolist Is Faced with a Marginal Revenue Curve

question 57

Multiple Choice

If an oligopolist is faced with a marginal revenue curve that has a gap in it, we may assume that

• A) it is colluding with its rivals to maximize joint profits.
• B) its demand curve is kinked.
• C) it is selling a standardized product.
• D) it is selling a differentiated product.

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Definitions:

Sole Proprietor

An individual who owns and operates a business alone, bearing sole responsibility for its debts and obligations.

Express Approval

Explicit consent or agreement to a proposal or condition, often formally stated or documented.

Authority

The legal power or right given to an individual or body to make decisions, direct others, and enforce obedience.

Partnership Creation

The formation of a partnership through the agreement of two or more individuals to carry on a business for profit as co-owners.