An oligopolist cannot use the MR = MC rule to find its equilibrium output level because
A)oligopolists do not face stable demand curves for their output
B)oligopolists do not try to maximize profits in the long run
C)it is too difficult to estimate marginal cost
D)the rule applies only in perfect competition
E)the minimum efficient scale exceeds total quantity demanded

Question

Quizplus · Accepted Answer

Oligopolists do not face stable demand curves for their output, as their actions can affect the behavior of their competitors and the overall market demand. As a result, they must use game theory and strategic behavior to determine their optimal output levels.

An Oligopolist Cannot Use the MR = MC Rule to Find