Which of the following statements is correct?
A) A firm in oligopoly will charge a price that is lower than the price charged in perfect competition.
B) If firms in oligopoly look only at their own self-interest in deciding the output they should produce, the total market output will exceed that of a monopoly.
C) If one oligopolist reduces the price of its product, its demand curve shifts leftward.
D) Because many producers join to form a cartel, the market becomes monopolistic competition.
E) It is in the self-interest of each firm in an oligopoly to take the actions that maximize all the firms' joint profit.

Question

Quizplus · Accepted Answer

In an oligopoly, if firms act in their own self-interest without collusion, the total market output can exceed that of a monopoly, as each firm tries to capture a larger market share.

Which of the Following Statements Is Correct