An oligopoly with a dominant price leader will produce a level of output below that which would prevail under ________ and above that which a ________ would choose in the same industry.
A) monopoly; cartel
B) competition; monopolist
C) monopoly; competitive industry
D) cartel; competitive industry

Question

Quizplus · Accepted Answer

In an oligopoly with a dominant price leader, the level of output is typically higher than what a monopolist would choose because the presence of other firms in the market exerts some competitive pressure. However, it is lower than the output level under perfect competition, where many firms would produce at a point where price equals marginal cost, leading to a higher overall output.

An Oligopoly with a Dominant Price Leader Will Produce a Level