How does the demand curve for an oligopoly firm differ from the demand curves for firms in competitive market structures?
What will be an ideal response?
The demand curve facing a perfectly competitive firm is horizontal at the prevailing market price. In other words, the perfect competitor does not influence market price; rather it takes the price as given. A firm in an oligopolistic industry can influence market price and therefore faces a downward-sloping demand curve. But not much else can be said about its demand curve because firms in oligopolistic industries are interdependent, that is, each firm reacts to its rivals' behaviors, or at least, to what it thinks its rivals will do. Consequently, it is difficult to determine an individual oligopolist's demand curve.
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Refer to Table 9-7. Fill in the following table with the opportunity costs of producing handbags and jackets for Cambodia and Thailand
Handbags Jackets Cambodia Thailand
A cartel behaves like
A) a monopolistic competitive firm. B) a perfectly competitive firm. C) a monopolist. D) an oligopolistic firm.
The demand for Ben & Jerry's ice cream is _________________ than is the demand for all ice cream because _______________.
A. less price elastic; the scope of the market for Ben & Jerry's is less broadly defined B. more price elastic; the scope of the market for Ben & Jerry's is less broadly defined C. less price elastic; Ben & Jerry's has fewer available substitutes D. more price elastic; Ben & Jerry's has fewer available substitutes
In the United States, the wage premium for college education has been
a. decreasing since 1980. b. increasing since 1980. c. higher for males. d. decreasing since 1990.