Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms' production levels as given. Then in equilibrium the output effect
a. must dominate the price effect.
b. must be smaller than the price effect.
c. must balance with the price effect.
d. can be larger or smaller than the price effect.
c
Economics
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A reduction in sales will generally cause
A) an increase in profit per unit of capital. B) a decrease in profit per unit of capital. C) no change in profit per unit of capital. D) ambiguous effects on profit per unit of capital. E) none of the above
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Economists often say that trade is a win-win situation. How do you justify this?
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