The equilibrium price in a market characterized by oligopoly is
A)higher than in monopoly markets and higher than in perfectly competitive markets.
B)higher than in monopoly markets and lower than in perfectly competitive markets.
C)lower than in monopoly markets and higher than in perfectly competitive markets.
D)lower than in monopoly markets and lower than in perfectly competitive markets.

Question

Quizplus · Accepted Answer

In oligopoly markets, there are a few large firms that dominate the market, which means that they have some control over the price of their products. As a result, the equilibrium price in an oligopoly market is generally lower than in a monopoly market, but higher than in a perfectly competitive market where there is no market power. Therefore, choice C is the correct answer.

The Equilibrium Price in a Market Characterized by Oligopoly Is