Exhibit 10.7

-Refer to Exhibit 10.7,which shows the activity of an oligopoly industry.A firm producing at point b is likely _____

Question

Exhibit 10.7
 
-Refer to Exhibit 10.7,which shows the activity of an oligopoly industry.A firm producing at point b is likely _____

Quizplus · Accepted Answer

A firm producing at point b has already established itself in the market and is producing at a level where it can earn maximum profit. This suggests that it is an existing firm in the industry, rather than a new entrant. Additionally, the fact that the industry is an oligopoly indicates that there are only a few firms operating in the market, which further supports the idea that the firm at point b is an existing firm. It is not a monopolistic or perfectly competitive firm because in a monopolistic or perfectly competitive market, firms do not have the power to influence market prices. It is also not a monopsony because the graph does not provide any information regarding the number of buyers in the market.

Exhibit 10.7 -Refer to Exhibit 10.7,which Shows the Activity of an Oligopoly