Question

Some analysts consider oligopolies to be potentially less efficient than monopoly firms because at least monopoly firms tend to be regulated. Arguments in favor of a more benign view of oligopolies include: Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. A) Oligopolistic industries may promote technological progress. B) unanswered Oligopolies may engage in limit pricing to keep out potential entrants. C) unanswered Oligopolies are self-regulating. D) unanswered Oligopolies can be kept in line by foreign competition.

Answer 1

Answer: Oligopolistic industries may promote technological progress.

Oligopolies may engage in limit pricing to keep out potential entrants.

Oligopolies can be kept in line by foreign competition. (A, B and D).

Explanation:

Oligopoly is a market structure with few large producers with strategic behavior. In an oligopoly, every firm's share of the total market is determined by advertising and product development.

The arguments in favor of oligopoly include the promotion of technological progress, engaging in limit pricing in order to keep out potential entrants and also oligopoly can be kept in line by foreign competition.

Answer 2

Answer:

Only options A, B, and D are correct.

Oligopolistic industries may promote technological progress.

Oligopolies may engage in limit pricing to keep out potential entrants.

Oligopolies can be kept in line by foreign competition.

Explanation:

A market competition where the number of sellers controls the market at large is referred to as oligopoly.

Oligopolies can successfully threaten competition, they restrict output to maximize profits. Some oligopolies have a very less number of firms in competition, this allows them to act more like a monopoly, while other industries have a higher number of firms make it more difficult to determine the best price.

The oligopolistic firms who are price leaders often limit the prices to hinder new entrances, because at a higher price a new entrant can survive on a smaller market share and dilute the concentration of competition. However, several factors limit the pricing power of oligopolies, these include foreign competition and technological advances.

Therefore, only options A, B, and D are correct.