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Suppose an oligopolist individually maximizes its profits. When calculating profits, if the output effect exceeds the price effect on the marginal unit of production, then the oligopolist ?

A. Should produce more units

B. has maximized profits

C. is in a Nash equilibrium

D. Should produce fewer units

E. should exit the industry

Related Questions on Oligopoly Mcqs for Economics

Many economics argue that resale price maintenance ?

A. has a legitimate purpose of stopping discount retailers from free riding on the services provided by full services retailers?

B. is price fixing and, therefore is prohibited by law

C. is price fixing and therefore, is prohibited by law and enhances the market power of the producer

D. enhances the market power of the producer

As the number of sellers in an oligopoly increases ?

A. output in the market tends to fall because each firm must cut back on production

B. the price in the market moves further from marginal cost

C. collusion is more likely to occur because a larger number of firms can place pressure on any firm that defects

D. The price in the market moves closer to marginal cost