A market is oligopolistic when:

there are spillover effects.
there are only a few sellers.
income effects outweigh substitution effects.
production functions have constant returns.


Here is Jim's willingness to pay for shirts:

Number of
Shirts
Willingness
to Pay
1
$10.01
2
$8.00
3
$3.00
4
$1.00

If a seller makes an all-or-nothing offer of take three shirts or nothing, what is the highest price it can charge Jim and still make the sale?

$21.00
$10.00
$9.00
$3.00


 Back to Reading Overview Next Page