1.Which of the following does NOT describe oligopolies? A.The rivals react to bu

Question

1.Which of the following does NOT describe oligopolies?
A.The rivals react to business decisions made by other firms.
B.The firms are price-takers.
C.There are just a few firms.
D.The products may be either homogeneous or heterogeneous.

2.In a two-firm oligopoly that has decided to jointly maximize profits, we would expect that the output:
A.Would be split fifty-fifty.
B.Would be greater than the monopoly quantity.
C.Would be set where the sum of their MC’s equals to the industry’s MR.
D.Would be determined by a federal mediator.

Explanation / Answer

1. B. Firms are typically large and are price seekers rather than price takers. 2. C They would produce like a monopoly (industry MC=MR) and then agree to split the production quantity.

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