The Manner in Which One Oligopolist Reacts to a Change

question 5

Multiple Choice

The manner in which one oligopolist reacts to a change in price, output, or quality made by another oligopolist in the industry is

• A) a cooperative game.
• B) the reaction function.
• C) a zero-sum game.
• D) the concentration ratio.

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Definitions:

Differential Cost

The amount of increase or decrease in cost expected from a particular course of action compared with an alternative.

Unit Cost

The total expense incurred to produce, store, and sell one unit of a product, including direct materials, direct labor, and overhead costs.

Modifying Style

The process of altering or customizing a particular format or design to meet specific requirements.

Sunk Cost

Costs that have already been incurred and cannot be recovered, which should not influence future financial decisions.