If an oligopolistic firm, with constant unit cost equal to $40, faces a demand curve, then the firm will: A

Marketing Jan 12, 2021

If an oligopolistic firm, with constant unit cost equal to $40, faces a demand curve, then the firm will:

A. produce 2 units of output.

B. produce 4 units of output.

C. produce 6 units of output.

D. None of the above is correct.

Expert Solution

The correct option is D. None of the above is correct.

Oligopolistic output cannot be determined with the given information. This is because the price and decision in the oligopolistic firms are indeterminate individually and independently. Any decision by one firm will be affected by the decisions of the other firms. This leads to uncertainty in the market.

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