The possible alternatives for an oligopoly range from the monopoly case with ________ to the perfectly competitive case with ________.
A) high output; low output
B) low prices; high prices
C) low profits; high profits
D) low output; high output
E) no cooperation among the firms; much cooperation among the firms

Question

Quizplus · Accepted Answer

An oligopoly can range from a situation where firms produce a low level of output (similar to a monopoly) to a situation where firms produce a high level of output (similar to perfect competition). This is because in an oligopoly, firms have some degree of market power and can choose to cooperate or compete aggressively. However, in a perfectly competitive market, firms have no market power and must produce at the efficient level of output, resulting in high output. Thus, D is the best choice.

The Possible Alternatives for an Oligopoly Range from the Monopoly