If an oligopolistic firm attempts to increase its price
A) total revenue will increase.
B) it faces an inelastic demand curve.
C) it faces an elastic demand curve.
D) competitors will match its increased price.

Question

Quizplus · Accepted Answer

In an oligopolistic market, if a firm attempts to increase its price, it faces an elastic demand curve because consumers have close substitutes provided by competitors. This means consumers are likely to switch to competitors' products, leading to a decrease in quantity demanded for the firm that increased its prices.

If an Oligopolistic Firm Attempts to Increase Its Price