Question

which of the following is true? group of answer choices in oligopoly a change in marginal cost never has an effect on output or price. in cournot oligopoly firms produce an identical product at a constant marginal cost and engage in price competition. none of the answers is correct. in bertrand oligopoly each firm believes that its rivals will hold their output constant if it changes its output.

Answer 1

The correct statement is that in Bertrand oligopoly each firm believes that its rivals will hold their output constant if it changes its output.

Step-by-step explanation:

In oligopoly, each firm believes that its rivals will hold their output constant if it changes its output. This is true in a Bertrand oligopoly. In a Cournot oligopoly, firms produce an identical product at a constant marginal cost and engage in price competition. In Bertrand oligopoly, firms produce identical products and set prices rather than quantities. Therefore, the correct answer is: in Bertrand oligopoly each firm believes that its rivals will hold their output constant if it changes its output.