The key feature of oligopoly market.
Answer to Problem 1CQQ
Option “d” is correct.
Explanation of Solution
Sub part (d):
In an oligopoly, there are few numbers of sellers selling identical products. The key feature of an oligopoly is a small number of firms acting strategically or firms acting just like a union. It can be termed as cartel. The firms are acing strategically; it will help to maximize the total profit of each member firm. Thus, option “d” is correct.
Sub part (a):
Each firm in the oligopoly produces similar and differentiated products. Thus, option “a” is incorrect.
Sub part (b):
The oligopoly firm sets the quantity demand where the marginal revenue is equal to the marginal cost and fixes the price equivalents to that point in the demand curve that is not fixed by a single firm. Thus, option “b” is incorrect.
Sub part (c):
The firm sets the quantity demand where the marginal revenue is equal to the marginal cost and fixes the price equivalent to that point in the demand curve. Thus, option “c” is incorrect.
Concept introduction:
Oligopoly market: Oligopoly is a market structure with few numbers of large sellers, offering similar or identical products.
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Chapter 17 Solutions
Principles of Microeconomics
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