Asked by Abbie Medina on May 13, 2024
Verified
Oligopolists use limit pricing to maximize short-run profits.
Limit Pricing
A strategy where a firm sets its price low enough to deter entry by potential competitors into the market, aiming to maintain its dominant position and protect its market share.
- Recognize the attributes and consequences associated with collusive and non-collusive oligopolies.
- Analyze the effects of market share and competitive dynamics on pricing and profitability approaches.
Verified Answer
HC
Hannah ConnollyMay 13, 2024
Final Answer :
False
Explanation :
Oligopolists use limit pricing to deter entry into the market by making it unprofitable for potential competitors, rather than to maximize short-run profits.
Learning Objectives
- Recognize the attributes and consequences associated with collusive and non-collusive oligopolies.
- Analyze the effects of market share and competitive dynamics on pricing and profitability approaches.