When an oligopolist individually chooses its level of production to maximize its profits, it produces an output that is ?
Correct answer: A. more than the level produced by a monopoly and less than the level produced by a competitive market
- A. more than the level produced by a monopoly and less than the level produced by a competitive market
- B. less than the level produced by a monopoly and more than the level produced by a competitive market
- C. less than the level produce by either monopoly or a competitive market
- D. more than the level produced by either monopoly or a competitive market
Explanation
An oligopolist recognizes that expanding output affects the market price, so it produces more than a monopolist but less than firms in a competitive market. This places oligopoly output between monopoly and perfect-competition output.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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