If a Legal Oligopoly Exists

question 64

Multiple Choice

If a legal oligopoly exists,

• A) the firms always engage in a "tit for tat" strategy.
• B) there is the possibility that the market is large enough for more firms.
• C) the firms never collude.
• D) monopoly profits cannot be earned.
• E) the firms may legally merge and become a monopoly.

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Definitions:

Explicit Cost

A cost that requires an outlay of money.

Economic Profit

Revenue minus the opportunity cost of resources used; usually less than the accounting profit.

Accounting Profit

Revenue minus explicit cost.

Factors of Production

The resources used in the creation of goods and services, traditionally categorized into land, labor, capital, and entrepreneurship.