The fact that the firms in an oligopoly are mutually interdependent means that each firm:
A) must consider the reactions of its competitors when it sets the price for its output.
B) produces a product that is similar, but not identical, to the products of its competitors.
C) produces a product that is identical to the products of its competitors.
D) faces a perfectly elastic demand curve for its product.
A
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With respect to water and diamonds, water
A) has a higher marginal utility than diamonds. B) has a lower marginal utility than diamonds. C) is cheaper than diamonds because it has a lower total utility. D) is cheaper than diamonds because it has a higher total utility.
In the short run, the monopolist should continue to produce whenever
a. price is greater than zero b. price is less than average total cost c. price is greater than average variable cost d. price divided by average total cost exceeds the ratio of marginal cost to average cost at the optimal output e. price is less than average variable cost at the optimal output