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Dominik [7]
3 years ago
6

Suppose an oligopoly consists of two firms. Firm A lowers price and Firm B responds by lowering its price by the same amount. If

average costs and industry output remain the same, which of the following will occur?

Mathematics
1 answer:
VMariaS [17]3 years ago
4 0

Answer:

The profits for firma A and B will decrease.

Step-by-step explanation:

Oligopoly by definition "is a market structure with a small number of firms, none of which can keep the others from having significant influence. The concentration ratio measures the market share of the largest firms".

If the costs remain the same for both companies and both firms decrease the prices then we will have a decrease of profits, we can see this on the figure attached.

We have an equilibrium price (let's assume X) and when we decrease a price and we have the same level of output the area below the curve would be lower and then we will have less profits for both companies.

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Please help me I have been stuck on this question for ages
Finger [1]

Answer:28 green and 35 red

Step-by-step explanation:

Given

If there are r red counter and g green counter then

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Thus \frac{\text{No of g counter}}{\text{Total no of counter}}=\frac{4}{9}

\frac{g}{g+r}=\frac{4}{9}

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Also if 4 red and 2 green counter is added the probability of drawing a green counter is

P(g)=\frac{10}{23}=\frac{\text{No of g counter}}{\text{Total no of counter}}

\Rightarrow \frac{10}{23}=\frac{g+2}{g+2+r+4}

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Substitute the value of g in equation (ii)[/tex]

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6 0
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