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3 years ago

How van an oligopoly cause market failure (8)

Business

1 answer:

Sladkaya [172]3 years ago

6 0

The correct answer to this open question is the following.

Although there are no options attached we can say the following.

An oligopoly can cause market failure because companies that form the oligopoly do not allow other companies to enter and compete in the market. This action limits consumers to choose from a variety of options, including quality, the best price, and service.

Often, oligopoly associates the strongest or more powerful companies in order to wipe out other minor competitors. They want to establish a dominant presence that affects prices and consumers participation.

Oligopoly practices result in inefficiency and instability in the market. That is why oligopolies are not good for the economy.

The automobile industry is mostly associated with an oligopoly.

When a market is controlled by just a few numbers of companies, but none of them is above the others, we are talking about an oligopoly. They can collude intentionally or not, to establish prizes and to not let other companies compete with them.

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Answer:

$4000 is the correct answer to the given question .

Explanation:

The marginal cost with compare to the labor can be written as

$MC\ = \frac{dQ}{dL} \\MC =\frac{d\ ( 2(K)1/2(L)1/2\ )}{dL} \\\\MC=\frac{\sqrt{K} }{\sqrt{L} }$

Here K=9 units putting this value in the previous equation we get

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$MC=\frac{3}{\sqrt{L} }$

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From the given question that are mention in question

Q = 2(K)1/2(L)1/2

Putting the value of K and L in the given equation we get

$Q\ =2 * \sqrt{9} \ * \sqrt{100} \\Q\ = 60$

So profit maximizing output is =$60 chairs as the chairs can be sold for the $400 each so = $60 * $400 *10=$24000 chairs

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3 years ago

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hope this helps you :)

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4 years ago

Read 2 more answers

How van an oligopoly cause market failure (8)​

How van an oligopoly cause market failure (8)