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Questions and Answers
What is the main reason for the inefficiency of a monopoly?
What is the main reason for the inefficiency of a monopoly?
- Low profits
- Lack of competition (correct)
- High barriers to entry
- Excessive government regulation
What is the Prisoner's Dilemma in the context of oligopolies?
What is the Prisoner's Dilemma in the context of oligopolies?
- A situation in which firms choose to merge and eliminate competition
- A situation in which firms choose to exit the market and reduce prices
- A situation in which firms choose to compete and minimize profits
- A situation in which firms choose to collude and maximize profits (correct)
What is the difference between monopolistic competition and perfect competition?
What is the difference between monopolistic competition and perfect competition?
- Barriers to entry
- Profit maximization
- Number of firms
- Product differentiation (correct)
