This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Why is it difficult for an oligopolist to determine its profit-maximizing price and ... (Read 16 times)

charchew

  • Hero Member
  • *****
  • Posts: 579
on: Jun 30, 2018
Why is it difficult for an oligopolist to determine its profit-maximizing price and output?

Question 2

Risk-averse people cut their risks by:
 a. diversifying their wealth into physical assets.
  b. investing their wealth into similar kinds of assets.
  c. investing their wealth only in risk-free assets.
  d. diversifying their wealth into different assets.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

cpetit11

  • Sr. Member
  • ****
  • Posts: 321
Reply #1 on: Jun 30, 2018
Answer to Question 1

It is difficult to predict how firms will react in situations of mutual interdependence. No firm knows what its demand curve looks like with any degree of certainty, and therefore it has a limited knowledge of its marginal revenue curve. To know anything about its demand curve, the firm must know how other firms will react to its prices and other policies. In the absence of additional assumptions, then, equating marginal revenue and expected marginal cost is relegated to guesswork. Thus, it is difficult for an oligopolist to determine its profit-maximizing price and output.

Answer to Question 2

D


charchew

  • Member
  • Posts: 579
Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

jamesnevil303

  • Member
  • Posts: 337
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

Essential fatty acids have been shown to be effective against ulcers, asthma, dental cavities, and skin disorders such as acne.

Did you know?

Eating food that has been cooked with poppy seeds may cause you to fail a drug screening test, because the seeds contain enough opiate alkaloids to register as a positive.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Using Parallax to Determine Distance Using Parallax to Determine Distance
How to use the discriminant to determine the value of k in a quadratic with no real roots How to use the discriminant to determine the value of k in a quadratic with no real roots
How to use the discriminant to determine the value of k in a quadratic with one real root How to use the discriminant to determine the value of k in a quadratic with one real root
Price of Computers, 1982–2010 Price of Computers, 1982–2010
Nitin earns $48,000 per year. Determine his gross earnings for each pay period if he is paid ... Nitin earns $48,000 per year. Determine his gross earnings for each pay period if he is paid ...
Cost = $99.49; Rate of markup based on cost = 32%. Find the markup and selling price. Cost = $99.49; Rate of markup based on cost = 32%. Find the markup and selling price.
Video: Global warming and its effect on climate change

For a complete list of videos, visit our video library