What are the characteristics of oligopoly?
The following are characteristics of oligopoly:
• relatively few firms
• products may be homogeneous or differentiated
• very high barriers to entry into the industry
• possible long run economic profits
• firms exhibit a mutual interdependence--their pricing and output decisions affect the decisions and market share of each of the other firms
• difficulty determining the profit-maximizing price and output levels
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In January 2001, the euro/dollar exchange rate was 1.10, and in January 2002, the euro/dollar exchange rate was 1.120 What happened to the exchange rate during this period?
A) Euro appreciated against the dollar. B) Euro depreciated against the dollar. C) Dollar appreciated against the euro. D) Both B and C.
Which of the following best describes the idea of a political business cycle?
a. Politicians have a bias to cut taxes and increase government spending. b. Special interests result in alternating federal deficits. c. Politicians will use fiscal and monetary policy to cause output, real incomes, and employment to be rising prior to elections. d. Good intentions of politicians influence the business cycle.