Alice wants to prove to her parents that listening to music while she does her homework will help her get better grades. She dec
ides to ask 25 of her friends if they listen to music while they do their homework and what their grades are. She finds that her friends who have high grades also listen to music while they do their homework. She tells her parents that she has proven that listening to music while doing homework will cause her grades to improve. What mistake has Alice made?
1 answer:
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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.
