Asked by Carley Lambeth on May 16, 2024
Verified
The conclusion that oligopoly is inefficient relative to the competitive ideal must be qualified because:
A) industry price leaders often select a price equal to marginal cost.
B) over time oligopolistic industries may promote more rapid product development and greater improvement of production techniques than if they were purely competitive.
C) increased output due to persuasive advertising may perfectly offset the restriction of output caused by monopoly power.
D) many oligopolists sell their products in monopolistically competitive or even purely competitive industries.
Oligopoly
A market structure characterized by a small number of firms controlling a large market share, resulting in limited competition.
Competitive Ideal
A market situation wherein there is perfect competition, with no single buyer or seller able to influence prices or market conditions.
Product Development
The complete process of bringing a new product to market, from concept through design, development, and marketing.
- Understand the concepts and efficiency implications of different market structures, including competitive markets, monopolies, monopolistic competition, and oligopolies.
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Learning Objectives
- Understand the concepts and efficiency implications of different market structures, including competitive markets, monopolies, monopolistic competition, and oligopolies.
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