Asked by
Aimee ManFung
on Oct 25, 2024Verified
In the dominant firm model, the fringe firms:
A) are price takers.
B) maximize profit by equating average revenue and average cost.
C) determine their price and output before the dominant firm determines its price and output.
D) all of the above
E) none of the above
Dominant Firm Model
An economic model that describes a market structure in which a single large firm has a significant market share and can influence the market price.
Fringe Firms
Smaller companies in a market that operate alongside the largest or mainstream businesses, often filling niches or offering alternative products.
Price Takers
Firms or individuals in a market who accept the prevailing prices and whose actions have no effect on said prices due to their small market share.
- Comprehend the various oligopoly frameworks and their predictions regarding pricing and output levels.
- Examine the tactical deliberations of companies within oligopolistic markets, focusing on pricing and advertising tactics.
Verified Answer
MC
Learning Objectives
- Comprehend the various oligopoly frameworks and their predictions regarding pricing and output levels.
- Examine the tactical deliberations of companies within oligopolistic markets, focusing on pricing and advertising tactics.