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13 December, 04:24

If an oligopolist's MC curve shifts upward but still passes through the gap in the MR curve, which of the following will be the firm's profit-maximizing response?

A The use of nonprice methods to compete.

B No change in price.

C All of the answers are correct

D No change in output.

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Answers (1)
  1. 13 December, 04:39
    0
    C All of the answers are correct

    Explanation:

    A market structure is termed as oligopoly when there are very few suppliers in a market of so many buyers. For oligopoly, the profit is maximized where the marginal cost equals the marginal revenue. If the marginal cost curve shifts upwards, it means that it increases. In an attempt to increase the cost in one firm, all the consumers will shift to the other firms, in an attempt to increase output, a company will make lesser profit. In this case, it means that the company will have to make use of non-price methods to compete. Therefore, the correct answer is C as the above given answers are all correct.
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