Question

Price wars in oligopoly

result in monopoly profits.

reduce allocative efficiency.

never benefit the economy.

might lead firms to price their products equal to marginal cost.

never benefit consumers.

In a perfectly competitive market, firms have

no control over price, so focus on other attributes such as quality or marketing.

no control over price, so focus on quantity.

no control over quantity, so focus on other attributes such as quality or marketing.

no control over quantity, so focus on price.

complete control over price, quantity, and other aspects of the good they produce.

Answer 1

Answer:- Price wars in oligopoly

Correct Answer:- might lead firms to price their products equal to marginal cost.

ReasonL- Due to an intense price war, the firms operating in oligopoly may be forced to reduce the price and these firms will reduce their prices up to the point where they can recover marginal cost,

Answer:- In a perfectly competitive market, firms have

Correct Answer:- no control over price, so focus on quantity.

Reason- In case of perfect competition, prices are not controlled by the firms operating in that industry and thus they try to produce the output level where they can maximize their profit.

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