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
-Oligopoly can arise from:
A)diseconomies of scale in production.
B)limited demand for a product in the market.
C)government regulations.
D)easy availability of the crucial inputs.
E)reduction of trade barriers.

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
-Oligopoly can arise from:
A)diseconomies of scale in production. 
B)limited demand for a product in the market. 
C)government regulations. 
D)easy availability of the crucial inputs. 
E)reduction of trade barriers.

Quizplus · Accepted Answer

Government regulations can lead to oligopoly by restricting entry into a market, thus allowing only a few firms to dominate.

The Figure Given Below Shows the Revenue and Cost Curves