The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-An oligopoly market consists of:
A)many firms which produce a standardized product.
B)at least five firms one of which dominates the market.
C)firms that make independent pricing and output decisions.
D)a group of firms that dominate the market.
E)firms which face perfectly elastic demand curves.

Question

The figure given below shows the revenue and cost curves of a monopolistically competitive firm.Figure 12.4
  MR: Marginal revenue curve
ATC: Average total cost curve
MC: Marginal cost curve
-An oligopoly market consists of:
A)many firms which produce a standardized product. 
B)at least five firms one of which dominates the market. 
C)firms that make independent pricing and output decisions. 
D)a group of firms that dominate the market. 
E)firms which face perfectly elastic demand curves.

Quizplus · Accepted Answer

The given information and graph describe the revenue and cost curves of a monopolistically competitive firm. The question asks about an oligopoly market, which is characterized by a group of firms that dominate the market. Therefore, the best choice is D - a group of firms that dominate the market. None of the other options accurately describes an oligopoly market.

The Figure Given Below Shows the Revenue and Cost Curves