Mastering Oligopoly Markets
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Questions and Answers

Which of the following best describes an oligopoly?

  • A market with many small sellers who compete for market share
  • A market with a few large sellers who control the industry (correct)
  • A market with multiple sellers who collude to control prices
  • A market with one dominant seller who controls the industry

    • What are some characteristics of oligopolistic markets?

  • Differentiated products, many market participants, and elastic demand
  • Differentiated products, few market participants, and inelastic demand
  • Homogenous products, many market participants, and elastic demand
  • Homogenous products, few market participants, and inelastic demand (correct)

    • How do firms in oligopolistic markets influence prices?

  • By manipulating the demand function
  • By colluding with other firms to set prices (correct)
  • By increasing production to lower prices
  • By offering discounts and promotions

    • What is meant by the term 'mutually interdependent' in relation to firms in an oligopoly?

    <p>Firms are economically connected and their actions affect each other</p> Signup and view all the answers

    Under what circumstances can oligopolies develop without collusion?

    <p>When there is fierce competition among market participants</p> Signup and view all the answers

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