The economic inefficiency in an oligopoly may be reduced by the following, except:
A. Increased competition from foreign producers
B. Limit pricing due to potential entrants
C. Economic profits used to fund technological advance
D. Aggressive advertising by rivals
D. Aggressive advertising by rivals
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The price of coffee rose 40 percent and the quantity of coffee demanded fell by 20 percent. The quantity of doughnuts demanded also fell by 20 percent. From this information, we can conclude that
A) the demand for coffee is elastic. B) the demand for coffee is unit elastic. C) coffee is an inferior good. D) the cross elasticity demand between coffee and doughnuts is -0.5. E) the income elasticity of demand for coffee is 2.
The defining characteristic of oligopoly is product differentiation
a. True b. False
What will happen when there is a rightward shift in the demand curve?
A) The product price will instantaneously adjust downward. B) Product prices do not change in this situation. C) Producers will decrease the product price. D) A new, higher price is not instantaneously achieved, but the price will rise over time.
Marginal utility
A. is the usefulness a consumer derives from a certain good or service. B. is the utility a consumer derives from a certain good or service. C. increases as more of a good or service is consumed. D. is the additional utility derived from consuming one more unit of a good or service.