Question

Which of the following statements about oligopolies is not correct? a. An oligopolistic market has only a few sellers. b. The actions of any one seller can have a large impact on the profits of all other sellers. c. Oligopolistic firms are interdependent in a way that competitive firms are not. d. Unlike monopolies and monopolistically competitive markets, oligopolies prices do not exceed their marginal revenues.

Answer 1

Answer:

d. Unlike monopolies and monopolistically competitive markets, oligopolies prices do not exceed their marginal revenues.

Explanation:

An oligopoly can be defined as a market formation where in a given sector of the economy there are only a small number of competing companies offering a product or service. Its structure is formed by imperfect competition (between monopoly and perfect competition).

The difference between monopoly and oligopoly is that the number of companies that the market has will set the price of products in an oligopoly market, whereas in the monopoly only one company dominates the market and therefore that company determines the price of the good, as it is a market without competition. Therefore, alternative D is the incorrect one.