In the game in which two oil companies own adjacent oil fields, the companies will not use the oil efficiently because
a. neither company has a dominant strategy in the game.
b. the companies collude and produce a quantity of oil that is less than the socially-efficient quantity.
c. the pool from which they recover the oil is a common resource.
d. the pool from which they recover the oil is not large enough to allow both companies to earn a positive profit.
c
You might also like to view...
Which of the following is TRUE regarding the long run for a firm in monopolistic competition?
A) P = MC = ATC B) P = MC = MR C) ATC = MC = MR D) P = ATC
Labor saving nonneutral technical progress allows a firm to
A) produce more output with the same inputs. B) use less labor and the same amount of other inputs to produce the same level of output. C) use more labor to produce the same level of output. D) use less labor and more of other inputs to produce the same level of output.