Question 39 (1 point) An industry composed of three firms, each of which considers the potential reactions of its rivals in making pricing decisions, yet is not concerned with the potential entry of other firms, can best be described as: perfect competition a monopoly an oligopoly monopolistic competition competitive monopoly
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This rules out perfect competition, which involves a large number of firms, and a monopoly, which involves only one firm. Second, each firm considers the potential reactions of its rivals in making pricing decisions. This suggests that the firms have some degree Show more…
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Consider an oligopoly industry whose firms have identical demand and cost conditions. If the firms decide to collude, then they will want to collectively produce the amount of output that would be produced by: a. A monopolistic competitor. b. A pure competitor. c. A pure monopolist. d. None of the above.
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One key difference between an oligopoly market and a competitive market is that oligopolistic firms are price takers while competitive firms are not. Oligopolistic firms sell their product at a price equal to marginal cost while competitive firms do not. Oligopolistic firms can affect the profit of other firms in the market by the choices they make while firms in competitive markets do not affect each other by the choices they make. Oligopolistic firms sell completely unrelated products while competitive firms do not.
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