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The industry demand curve in an oligopoly market
A. is more elastic than the demand curve facing an individual oligopolistic firm.
B. is more inelastic than the demand curve facing an individual oligopolistic firm.
C. has the same elasticity as the demand curve facing an individual oligopolistic firm.
Answer: B
Explanation:
If an oligopolistic firm changes price alone, the response will be much stronger than the response to the same price change when all of the firm's rivals make the same move. The industry demand curve is relatively inelastic in comparison to the demand curve one firm faces when none of its rivals change price. That is how cheating on collusive agreements pays off, i.e. one firm gains by cutting price because the other firms have not cut price.
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NEW QUESTION: 3
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myFooController m = new myFooController();
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myFooController m = new myFooController();
C. System.assert(m.prop !=null);
myFooController m = new myFooController();
D. System.assert(m.prop ==0);
myFooController m = new myFooController();
Answer: B
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