Game theory is often used to explain decision-making in
A)monopolistic competition.
B)oligopoly.
C)all the market structures except competition.
D)competition.
E)monopoly.

Question

Quizplus · Accepted Answer

Game theory is particularly relevant to explain decision-making in oligopoly markets, where a few large firms interact strategically and each firm's decision depends on the decisions of the others. In monopolistic competition, firms do not interact strategically as they do not have a significant impact on the market price. In perfect competition, there is no strategic interaction between firms as they are price takers. In a monopoly, there is no competition and the monopolist sets the price and output level independently. Therefore, the most appropriate choice is B.

Game Theory Is Often Used to Explain Decision-Making in