Under the oligopoly market, according to __________, each producer can always lower the price until the price becomes equal to the cost of production.
Bertrand’s model
The correct answer is option 2. According to Bertrand's model in oligopoly markets, producers are assumed to compete by setting prices, and each firm can continuously lower the price until it reaches the cost of production, resulting in zero profits. This differs from Cournot’s model, where firms compete on quantity rather than price.
Similar Questions
Because of price rigidity, firms under oligopoly face a ____ demand curve.
______ may be defined as a market situation in which market price is largely determined by the forces of total demand and total supply in the market.
Under ____ the cross elasticity of demand between the product of the firm and that of other commodity in the market is zero.
In a competitive market, _______ is the price maker.
Under which market condition does the firm make only normal profit in the long run?
Important Questions from Markets
Because of price rigidity, firms under oligopoly face a ____ demand curve.
______ may be defined as a market situation in which market price is largely determined by the forces of total demand and total supply in the market.
Under ____ the cross elasticity of demand between the product of the firm and that of other commodity in the market is zero.
State one limitation of the operation of a supermarket.
In a competitive market, _______ is the price maker.
