A Form of Oligopoly in Which a Dominant Firm Sets

question 183

Multiple Choice

A form of oligopoly in which a dominant firm sets the price and all smaller firms in the industry follow the dominant firm's pricing policy is called

• A) the Cournot model.
• B) the contestable markets model.
• C) a cartel.
• D) the price-leadership model.

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Definitions:

Utility Function

A mathematical representation that ranks an individual's preference for different combinations of goods or outcomes.

Budget Constraint

The limit on the consumption bundles that a consumer can afford to purchase, based on their income and the prices of goods and services.

Income

Income that is earned from work or investments, which is typically received at regular intervals.

Nuts

Edible seeds or fruits with a hard outer shell, often consumed as snacks or used in cooking.