Question

which statement is true about oligopolies? multiple choice question. they achieve allocative efficiency because they produce at minimum average total cost. they achieve productive efficiency because their marginal revenue equals marginal cost. they do not achieve allocative efficiency because their average total cost exceeds price. they do not achieve allocative efficiency because their price exceeds marginal cost.

Answer 1

Oligopolies do not achieve allocative efficiency as their pricing exceeds marginal cost, contrary to a perfectly competitive market where price equals marginal cost.

Step-by-step explanation:

The true statement about oligopolies is that they do not achieve allocative efficiency because their price exceeds marginal cost. Oligopolies, similar to monopolistically competitive firms and monopolies, do not produce at the point where price (P) equals marginal cost (MC). Therefore, they tend to produce less and charge a higher price than firms in a perfectly competitive market, where P = MC and allocative efficiency is achieved.