Question

An oligopoly may _______________ economic profits and may _____________ economic loses in the short run.

Group of answer choices:

not have, have

have, have

not have, not have

have, not have

Answer 1

Answer :- Option 'd' is the correct Answer

In case of an oligopoly there is a barrier to entry, so that new firms cannot just join the oligopoly, then oligopoly firms will turn an economic profit in both the short and long run. However, this economic profit will be less than a monopolists, but more than a competitive firms (which is generally considered to be zero). The "normal" profit you're referring to is often called accounting profit, which is assumed to be the normal return for a typical competitive business.

Oligopolist firms extract a higher profit by choosing some level of output that is somewhere "between" the monopolist and competitive firms' output levels.