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Author Question: Refer to Figure 12-5. What is the amount of the firm's fixed cost of production? A) 5,400 B) ... (Read 123 times)

jrubin

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on: Jun 29, 2018
Refer to Figure 12-5. What is the amount of the firm's fixed cost of production?
 
  A) 5,400 B) 6,750
  C) 8,100 D) It cannot be determined.

Question 2

How does the demand curve for an oligopoly firm differ from the demand curves for firms in competitive market structures?
 
  What will be an ideal response?
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popopong

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

The demand curve facing a perfectly competitive firm is horizontal at the prevailing market price. In other words, the perfect competitor does not influence market price; rather it takes the price as given. A firm in an oligopolistic industry can influence market price and therefore faces a downward-sloping demand curve. But not much else can be said about its demand curve because firms in oligopolistic industries are interdependent, that is, each firm reacts to its rivals' behaviors, or at least, to what it thinks its rivals will do. Consequently, it is difficult to determine an individual oligopolist's demand curve.


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jrubin

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Reply #2 on: Jun 29, 2018
Thank you :)


popopong

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Reply #3 on: Jun 29, 2018
Happy to help you


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