Question

Individual profit earned by Dave, the oligopolist, depends on which of the following? (i) The quantity of output that Dave produces (ii) The quantities of output that the other firms in the market produce (iii) The extent of collusion between Dave and the other firms in the marketa. (i) and (ii)b. (ii) and (iii)c. (iii) only

Answer 1

Answer: All of the above

Explanation: An oligopoly is an economic condition in which a small number of sellers exert control over the market of a commodity. As a market structure it usually a few firms producing a product.

Naturally, if Dave increases the quantity of output he produces, then there is potential for increased profit as it is possible to sell more or all of his produced output compared to other firms in the oligopoly. When there are few firms in the market, they may also be existence of collusion to set a price or output level for the market in order to maximize industry profits. Increased profits for all firms translates to increased profit on an individual basis.

Answer 2

The options are:

(i) The quantity of output that Dave produces (ii) The quantities of output that the other firms in the market produce (iii) The extent of collusion between Dave and the other firms in the marketa. (i) and (ii)b. (ii) and (iii)c. (iii) only d. All of the above

Answer:

d. All of the above

That is

(i) The quantity of output that Dave produces

(ii) The quantities of output that the other firms in the market produce

(iii) The extent of collusion between Dave and the other firms in the market.

Explanation:

An oligopoly is defined as an economy where there are small number of firms that cannot prevent others from having much impact in the market. These firms control the way are done with regards for price.and supply of goods and services.

So in this type of market the profit earned by Dave will depend on quantity of output produced by Dave, quantity of goods manufacturerd by other firms, and Dave's degree of collusion with other firms.