Which Statement About Oligopoly Is False

question 135

Multiple Choice

Which statement about oligopoly is false?

• A) Oligopolistic firms recognize their interdependence.
• B) Prices in oligopoly are predicted to fluctuate widely and frequently.
• C) A few firms play an important role in the sale of an identical or differentiated product.
• D) There is no single predicted pattern of action and reaction for oligopolists because one firm's behavior is a function of what its rivals do.

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Definitions:

Profitability Index

An economic instrument that evaluates the comparative profitability of an investment by dividing the current value of forthcoming cash flows by the initial cost of investment.

Cash Inflows

The total amount of money being transferred into a business, often from operations, financing, or investing activities; critical for assessing a company's liquidity and financial health.

Investment Projects

Initiatives or activities undertaken by an entity to invest capital with the aim of generating revenue or appreciating in value.

Internal Rate of Return

The discount rate at which the net present value of all cash flows from a particular project equals zero.