Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 17 - Part V - Oligopoly - Questions for Review - Page 366: 3

Answer

The quantity of an oligopoly is less than that of a competitive market. However, the price of an oligopoly is greater than that of a competitive market.

Work Step by Step

Oligopolists are self aware; know by increasing their output, their price decreases, and their overall profits lower. So, they will stop increasing output before price = marginal cost (which is what firms in a perfectly competitive market do).
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