Use the figure to answer the following question(s).
Figure 11-12

Figure 11-12 indicates the industry cost and demand conditions for a product produced in an oligopolistic industry. The price of this product is most likely to be

Question

Use the figure to answer the following question(s).
Figure 11-12

Figure 11-12 indicates the industry cost and demand conditions for a product produced in an oligopolistic industry. The price of this product is most likely to be

Quizplus · Accepted Answer

The price of this product will be between the intersection point of demand curve D1 and marginal cost curve MC1 (which is P ₁) and the intersection point of demand curve D1 and average total cost curve ATC1 (which is P ₂). This is because in an oligopolistic market structure, firms have some market power and can set prices above their marginal costs, but they also face competition and cannot charge prices significantly above their average total costs without losing market share. Therefore, the price will likely be somewhere in between these two points.

Use the Figure to Answer the Following Question(s)