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AP® Microeconomics

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Strategic Definition

APMICR-9X9XFW

The primary reason why game theory is used to depict the behavior of firms in an oligopoly is because

A

the firms take their rival's reaction into account before deciding their own action.

B

only a small number of firms can participate in an oligopoly.

C

the firms have a tendency to merge to increase their market power.

D

the firms produce a similar product.

E

the firms compete to overcome barriers to entry.