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Consider Kellogg's production and price choices in the breakfast cereal industry when it is characterized by the price-leadership model. Under this theory of oligopoly, all firms other than the dominant firm act as ____________ . Therefore, the horizontal sum of their _____________ curve.

User Lhlmgr
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Answer:

Price takers

marginal cost curve equal their supply curve

Step-by-step explanation:

An Oligopoly is when there are few large firms operating in an industry. While, a monopoly is when there is only one firm operating in an industry.

Oligopolies are characterised by:

price setting firms

product differentiation

profit maximisation

high barriers to entry or exit of firms

downward sloping demand curve

The firm that sets the market price in an oligopoly is known as the price setter while the firms that accepts the price set are known as the price takers

User Augre
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