All models of oligopoly involve pricing above marginal cost and output levels above the competitive level.

Question

Quizplus · Accepted Answer

Oligopoly models often involve pricing above marginal cost due to market power, but output levels are typically below the competitive level, not above. In competitive markets, firms produce where price equals marginal cost, leading to higher output levels compared to oligopolistic markets where firms have the power to set prices above marginal costs, resulting in lower output.

All Models of Oligopoly Involve Pricing Above Marginal Cost and Output