Which of the Following Observations Is True

question 216

Multiple Choice

Which of the following observations is true?

• A) Marginal analysis does not apply in oligopoly situations.
• B) Marginal revenue drops fast in an oligopoly, at the kinked point.
• C) In an oligopoly, setting the price at the level of the kink minimizes profit.
• D) In an oligopoly, prices are relatively less "sticky" at the kinked point.
• E) Price leadership does not occur in oligopoly situations.

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Definitions:

Selling Expense

Costs related to the selling of products or services, including advertising, sales staff salaries, and commissions.

Interest Expense

The cost associated with an organization's debt over a given period of time.

Accounts Receivable

This represents the funds owed to a business by customers for goods or services delivered or used but not yet paid for.

Net Operating Income

Represents the profitability from normal business operations, excluding income and expenses from unusual or non-recurring items.