Suppose a group of four opal-mining firms operate as an oligopoly.If there is an increase in output from one of the firms, then:
A)its price will increase and the other firms' prices will decrease
B)its price will decrease and the other firm's prices will be unchanged
C)its price will decrease and the other firm's prices will decrease
D)its price will increase and the other firms' prices will be unchanged

Question

Quizplus · Accepted Answer

In an oligopoly, firms are interdependent. An increase in output by one firm typically leads to a decrease in market prices, affecting all firms in the market. This is because the additional supply reduces the scarcity of the product, leading to lower prices.

Suppose a Group of Four Opal-Mining Firms Operate as an Oligopoly.If