47) Firms in an oligopoly i. are independent of each other\'s actions. ii. can e

Question

47) Firms in an oligopoly i. are independent of each other's actions. ii. can each influence the market price. ii. charge a price equal to marginal revenue. A) 1 only B) ii only C) ii only D) i and ii E) i, ii, and ii 48) Which of the following are characteristics of an oligopoly? i) The HHI for an oligopoly is between 100 and 1800. i) There are a few firms that compete. ii) The firms can increase their profit by forming a cartel. A) i and ii B) i and ii C) ii and ii D) i, ii, and ii E) ionly. 49) Which of the following is a model of Oligopoly A) Kinked Demand Curve Model. B) Collusive Pricing Model. C) Leadership Model. D) All of the Above. E) None of the Above. 50) Which of these concepts is associate with Oligopoly A) Strategic Behavior. B) Mutual Interdependence. C) Collusion. Cartel E) All of the Above

Explanation / Answer

47 . Correct option. B
Explanation: oligopoly has few sellers and each firm is so large that its actions affect market conditions and policies of other firms.
and it charges price equals to demand not MR.

48.C
Explanation: oligopoly has HHI more than 1800.
Cartel theory directs Oligopoly members to maximize profit by choosing their combined output at the level where their combined marginal revenue equals their combined marginal cost.

49. D.
Explanation: Kinked demand curve model was an initial attempt to explain sticky prices in oligopoly.
Collusive pricing model in which producers agree among one another as to pricing of output and allocation of output markets among themselves.
Price leadership is common in oligopolies, whereby a price leader sets the price and all the other competitors feel compelled to lower their prices to match.

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