The Figure Given Below Shows the Revenue and Cost Curves

question 12

Multiple Choice

The figure given below shows the revenue and cost curves of a firm. MC represents the marginal cost curve, AC the average cost curve, MR the marginal revenue curve, and AR the average revenue curve.Figure 9.4

-Which of the following characteristics distinguishes oligopoly from other market structures?

• A)Firms operating in an oligopoly are independent of each other.
• B)Firms operating in an oligopoly are interdependent.
• C)Oligopoly is the simplest of all the other market structures.
• D)An oligopolist does not face a downward-sloping demand curve.
• E)Entry into an oligopolistic market is easier than entry into a monopolistically competitive market.

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Definitions:

Sales Increase

A rise in the amount of products or services sold by a business within a specific period, indicating growth or an uptick in market demand.

Degree of Operating Leverage

A financial ratio that measures how sensitive a company's operating income is to changes in revenue, indicating risk level.

Variable Expenses

Costs that vary in total in direct proportion to changes in an activity level or volume, such as materials and labor costs.

Fixed Expenses

Expenses that remain constant regardless of the amount of goods produced or sold, including items like rent, salaries, and insurance costs.