What Is the Most Likely Response by Rivals When an Oligopolist

question 115

Multiple Choice

What is the most likely response by rivals when an oligopolist cuts its price to increase its sales?

• A)Raise their prices.
• B)Ignore the change.
• C)Cut their prices.
• D)Reduce their costs.

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Definitions:

Net Operating Income

A measure of a company's profitability from its regular business operations, deducting operating expenses from gross income.

Operating Leverage

A measure of how sensitive a company's operating income is to a change in its sales revenue, indicating the proportion of fixed to variable costs.

Net Operating Income

The profit a company generates from its operations, before taxes and interest, from its primary business activities.

Sales Decline

A decrease in the volume or value of sales over a specific period.