Check all of the following that apply to oligopolies. with an inelastic demand a
ID: 1113679 • Letter: C
Question
Check all of the following that apply to oligopolies.
with an inelastic demand and a price decrease, total revenue will decline.
the demand curve is inelastic above the prevailing price because other firms do not follow the price increase and buyers purchase from the lower-priced competitors
a firm that raises its price above the prevailing price has a decrease in total revenue
the demand below the prevailing
with an inelastic demand and a price decrease, total revenue will decline.
the demand curve is inelastic above the prevailing price because other firms do not follow the price increase and buyers purchase from the lower-priced competitors
a firm that raises its price above the prevailing price has a decrease in total revenue
the demand below the prevailing
Explanation / Answer
(A) incorrect, An reduction in the price will not impact the quantity demanded and the revenue will fall. other firms will also follow the suit and reduce price.
(b) check, the buyers only go to the low charging firm.
(c) check no other firm will increase its price and will therefore loose its share of demand due to ncreases price.