Consider an oligopolistic industry with N competing firms. Suppose that these firms have no fixed costs and that they all have the same marginal costs. Each firm must choose what quantity to produce independently of each other, and all firms must choose at the same time. If we increase the number of firms in this industry (to for example N+1), the market price a.increases b.decreases c.remains unchanged d.becomes nil e.none of the above
Consider an oligopolistic industry with N competing firms. Suppose that these firms have no fixed costs and that they all have the same marginal costs. Each firm must choose what quantity to produce independently of each other, and all firms must choose at the same time. If we increase the number of firms in this industry (to for example N+1), the market price a.increases b.decreases c.remains unchanged d.becomes nil e.none of the above
Chapter10: Monopolistic Competition And Oligoply
Section: Chapter Questions
Problem 9SQP
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Consider an oligopolistic industry with N competing firms. Suppose that these firms have no fixed costs and that they all have the same marginal costs. Each firm must choose what quantity to produce independently of each other, and all firms must choose at the same time. If we increase the number of firms in this industry (to for example N+1), the market
a.increases
b.decreases
c.remains unchanged
d.becomes nil
e.none of the above
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