Homework Answers
Ans: True
Explanation:
Inefficiency is oligopoly occurs because the firms in oligopoly market do not produce at the minimum AC where MC=AC. So, when there is potential entry of new firms in to the oligopoly industry and import of the goods produced by the oligopolists increases, competition will increase which leads to worsening of the inefficiency in oligoploly.
Thus, the statement is true.
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Number 25
QUESTION 25 Potential entry by new firms and competition from imports tend to worsen...
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