Managers in oligopoly firms must
A. advertise heavily in order to differentiate their product.
B. eliminate any barriers to entry if they hope to make short-run profits.
C. establish many varieties of their products to cover the spectrum of consumer tastes.
D. anticipate the reaction of rival firms.
Answer: D
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Why would a company continue to operate for many years while never once turning a profit rather than shut down immediately? Using revenue and cost analysis, explain when the company would shut down
What will be an ideal response?
Suppose the domestic market demand function in a certain market where Q is measured in thousands of units is Qd = 20 - 2.5P, and the domestic market supply function is Qs = 2.5P - 7.5. Suppose further that the world price for the good in question is $3.40 per unit. If the government places a $1.20 tariff on imported units of this good, how much revenue does the tariff generate?
A. $3,200 B. $3,600 C. $5,400 D. $3,000