The Profit-Maximizing Level of Output and the Profit-Maximizing Price for an Oligopolist

question 83

Multiple Choice

The profit-maximizing level of output and the profit-maximizing price for an oligopolist cannot be calculated when we don't know

• A)what the concentration ratio for the oligopolist's industry is.
• B)what the minimum efficient scale in the oligopolist's industry is.
• C)the demand curve and the marginal revenue curve of the oligopolist.
• D)the type of barrier to entry that exists in the oligopolist's industry.

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Definitions:

Overhead Rate

A calculation used to allocate overhead costs to produced goods or services, typically based on a specific activity base such as labor hours or machine hours.

Predetermined Overhead Rate

A rate calculated at the beginning of the period by dividing estimated total overhead costs by an estimated allocation base, used to apply overhead costs to products or services.

Unused Capacity

The portion of a company's production potential that is not being utilized to manufacture goods or provide services.

Estimated Activity

An approximation of the amount of work or level of effort needed for a particular task or project.