Question

If an oligopoly does not cooperate and each firm chooses its own quantity, the industry will produce a quantity of output that is _____ the competitive level and _____ the monopoly level.
a. less than; more than
b. more than; less than
c. less than; equal to
d. equal to; more than

Answer 1

Answer:

a. less than; more than 

Explanation:

An oligopoly is when there are few large firms operating in an industry.

A competitive industry is when there are many buyers and sellers of homogenous goods and services.

A Monopoly is when there is only one firm operating in an industry.

An oligopoly firm can choose to cooperate with other firms in the industry or not cooperate.

If firms do not cooperate they produce more goods than if they cooperated. The quantity produced can never be as much as that of a competitive firm because the number of producers in an oligopoly is less than that in a competitive firm.

The output would be more than the quantity produced by a monopoly because the number of producers in an oligopoly is more than that in a monopoly.

I hope my answer helps you.