Pleas help me with 16. The first best answer gets brainlist.
2 answers:
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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.
Answer:
Proof in explanation.
Step-by-step explanation:
I'm going to attempt this by squeeze theorem.
We know that is a variable number between -1 and 1 (inclusive).
This means that .
for all value
. So if we multiply all sides of our inequality by this, it will not effect the direction of the inequalities.
By squeeze theorem, if
and , then we can also conclude that
.
So we can actually evaluate the "if" limits pretty easily since both are continuous and exist at .
.
We can finally conclude that by squeeze theorem.
Some people call this sandwich theorem.