Answer to Question #288534 in Microeconomics for matt

Question

How do oligopolistic firm maximizes profits in the short run

Answer 1

• Oligopolistic firms maximize profit in the short run by equating marginal revenue to marginal cost.
• This results in an equilibrium price P and an equilibrium output Q.
• Since the oligopolistic firm will also have competition from similar firms in the market, it will have a kinked demand curve.