Under Oligopoly, a Few Large Firms Control Most of the Production

question 21

Multiple Choice

Under oligopoly, a few large firms control most of the production and sale of a product because:

• A)economies of scale make it difficult for small firms to compete.
• B)diseconomies of scale make it difficult for small firms to compete.
• C)zero economic profits are earned by firms in the long run.
• D)marginal costs increase as production expands
• E)the average total cost curve is inverted U-shaped.

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Definitions:

Interest Rate

The percentage charged on the total amount of borrowed money or paid on deposited funds, influencing the cost of loans and savings.

Initial Amount

The starting sum or value in financial transactions or calculations.

Stock Ownerships

The holding of shares in a company, which represents a claim on the company's assets and earnings.

Savings Accounts

Financial accounts that offer safe storage for customers' money with an interest-earning benefit, typically offered by banks and financial institutions.