One explanation for why oligopolies exist is that
a. it is easier to regulate a smaller number of firms
b. minimum efficient scale is small relative to the market, allowing a large number of firms to achieve minimum long-run average total cost
c. minimum efficient scale is large relative to the market, allowing only a few firms to achieve minimum long-run average total cost
d. minimum efficient scale may be greater than the market quantity demanded at the price equal to minimum long-run average total cost
e. competitive pricing drives firms from the market
C
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Which of the following would cause a change in the quantity demanded of a product?
A) a higher price B) a higher income C) expectations of future price increases D) All of the above are correct.
As the price of movie tickets increases, which of the following is most likely to happen?
a. The demand for DVDs will increase. b. The quantity of books demanded will decrease. c. The number of Broadway tickets purchased will decrease. d. The prices of popcorn and soda will increase. e. The number of movies being produced will decrease.
In the mid-1990s, real interest rates fell in the United States. This was the result of budget deficit
a. increases and tighter monetary policy. b. increases and looser monetary policy. c. reductions and looser monetary policy. d. reductions and tighter monetary policy.
Consider a game of the "Jack and Jill" type in which a market is a duopoly and each firm decides to produce either a "high" quantity of output or a "low" quantity of output. If the two firms successfully reach and maintain the cooperative outcome of the game, then
a. both the combined profit of the firms and total surplus are maximized. b. the combined profit of the firms is maximized but total surplus is not maximized. c. the combined profit of the firms is not maximized but total surplus is maximized. d. neither the combined profit of the firms nor total surplus is maximized.