Oligopolists will maximize total profits for all of the firms in the market at the rate of output where
A)TR = TC for the total market.
B)MR = MC for the marginal firm.
C)AR = AC for each firm.
D)A monopoly firm would produce if it was maximizing profits.

Question

Quizplus · Accepted Answer

Oligopolists will maximize total profits for all of the firms in the market at the rate of output where a monopoly firm would produce if it was maximizing profits. This is because oligopolists, when acting together as a cartel or when tacitly colluding, effectively operate as a monopoly by restricting output to maximize joint profits, aligning their strategy with the monopolistic approach of equating marginal revenue (MR) with marginal cost (MC) to determine the profit-maximizing level of output.

Oligopolists Will Maximize Total Profits for All of the Firms