C) is; to cheat regardless of the other firm's choice E) cheat on each other. *interindustry competition c) dominant firms *world trade These data are as follows: 30.334.531.130.933.731.933.131.130.032.734.430.134.631.632.432.831.030.230.232.831.130.733.134.431.032.230.932.134.230.730.730.730.630.233.436.830.231.530.135.730.530.630.231.430.730.637.930.334.130.4\begin{array}{lllll}30.3 & 34.5 & 31.1 & 30.9 & 33.7 \\ 31.9 & 33.1 & 31.1 & 30.0 & 32.7 \\ 34.4 & 30.1 & 34.6 & 31.6 & 32.4 \\ 32.8 & 31.0 & 30.2 & 30.2 & 32.8 \\ 31.1 & 30.7 & 33.1 & 34.4 & 31.0 \\ 32.2 & 30.9 & 32.1 & 34.2 & 30.7 \\ 30.7 & 30.7 & 30.6 & 30.2 & 33.4 \\ 36.8 & 30.2 & 31.5 & 30.1 & 35.7 \\ 30.5 & 30.6 & 30.2 & 31.4 & 30.7 \\ 30.6 & 37.9 & 30.3 & 34.1 & 30.4\end{array} E) Each firm has an incentive to cheat. C) perfectly elastic demand. d) It will always be U-shaped. For example, when a government grants a patent for an invention to one firm, it may create a monopoly. b) are few in number D) not an oligopoly. 2) In the dominant firm model of oligopoly, the larger firm acts like It thus limits the competition to only those already in the group. E) none of the above. C. Some market power. The profit-maximizing price of firm B is PB(>PA) and the quantity is Xbe. a) Its demand curve is downward-sloping B) a monopoly. b) greater than or equal to 50% A game that is played more than once between rivals is a ____ (Enter one word) game. Pure because the only source of market power is lack of competition. D) monopolistic competition. A) average total cost curve is discontinuous. Share with Email, opens mail client 5.3.5 Apply Concepts of Oligopoly and Oligopoly Models .pdf. A price war is a competition among the competitors of the business in lowering the price of their products to gain an advantage over their competitors in price and capture a greater market share. Therefore, necessarily they tend to react. D) if Bob does not change his decision, Jane would like to change hers. 16) A monopolistically competitive firm is like an oligopolistic firm insofar as A) both face perfectly elastic demand. c) Its marginal cost curve is made up of two segments Price fixing is an agreement between business competitors to increase (very often), reduce (perhaps for a short time), establish, or stabilize (rarely) prices, disregarding the prices governed by the market's flow of demand and supply. When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. e) is always upward sloping, a) depends on the actions of rivals to price changes, The four-firm concentration ratio understates the competition in the aluminum industry because aluminum competes with copper in many applications. b) strengthens The most important model of oligopoly is the Cournot model or the model of quantity competition. In other words, Therefore, within the oligopoly market the "ordinary" producers must have careful preparation to follow the changes in a policy coming from the main producers. One of theoligopoly characteristicsis the focus of its members on improving the product quality or offering benefits to make their brand unique. It is assumed that all of the sellers sellidentical or homogenous products.read more, monopoly, and monopolistic competition. *Patents, Which are reasons that that firms merge? What kind of game is it when firms choose their optimal pricing strategy today without worrying about possible interactions in the future? Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. Such companies have complete control of the market, earning high profits and gains in a specific sector or service. d) Dominant firms, What are oligopolists able to do by controlling price through collusion? Suppose that one of the two firms decided to reduce the price of its product by some amount resulting 20 % increase in its sales. And rest of the businesses or minor players follow the same. In the credit card industry, for example, Visa and MasterCard have a duopoly.read more. D) All of the above. D) entry into the industry of rival firms will have no impact on the profit of the cartel. 13) A dominant firm oligopoly might be one for which the Herfindahl-Hirschman Index is *providing misleading information Small Number of Number: The number of firms in an oligopoly market is small where each firm controls an important proportion of the total supply. Determinants of Price Elasticity of Supply. It helps avoid the potential price war and price rigidity. attempts to raise $425 million to use to build apartments in a growing area of Tulsa. The payoffs in the table are the economic profit made by Bud and Miller. A) each firm can act like a monopoly. . B) there are two producers of two goods competing in an oligopoly market 10) In the dominant firm model of oligopoly, the dominant firm produces the quantity at which marginal revenue equals In a(n) _____ game one firm moves first, committing to a strategy and then the rival firm responds. D) increase the amount they produce. The market share of the firms is unequal. they set up a 1 meter (100 cm) track. However, firm B follows the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. E) is not; frequently one of the smaller firms becomes the dominant firm, and the original dominant firm becomes less important. a) An outcome in the payoff matrix from which one firm wants to deviate since the current strategy is not optimal given the rival's strategic choice. What kind of problem does this represent with the four-firm concentration ratio? *Reduce uncertainty True or false: A one-time game occurs when firms will choose their pricing strategy for today without concern about future interactions with their rivals. A market is considered to be a(n) ______ when the largest four firms in an industry control more than 40% or more of the market. View full document. d) straight and steep A small number of sellers. a. A) a Competition Tribunal. C) average total cost. c) have no rivals b) pure monopoly B) predict that an increase in price by one firm is accompanied by price increases of other firms if every firm experiences a large enough increase in marginal cost. d) The same as a monopoly, By controlling ______ through collusion, oligopolists may be able to reduce ______, ______ profits and block the entry of new rivals. E) none of the above is done. B) raise the price of their products. d) its rivals match price decreases but ignore price increases, d) its rivals match price decreases but ignore price increases, Which of the following is true about the oligopolist if rivals match a price cut but ignore a price increase? D) potential entrants not entering the market. from a social viewpoint, monopolistic competition is better than perfect competition None of these Question 8 (1 point) A firm using advertising differs from a firm not using advertising in that the firm using advertising. Characteristics: There are few firms in the market serving many consumers. E) produce the efficient quantity. c) may be less desirable because they are not regulated by government to protect consumers corporations president in exchange for some land just before the negotiations with lenders began. c) Affect costs and influence the supply of rival firms Because of their large size and minimal competition, each firm in an oligopoly market structure influences the others. C) changes in the output of any member firms will have no impact on the market price. Market players in an oligopolistic market focus on non-price competition, ensure their brands are uniquely identifiable and apply hidden advertising tactics. *The firm's profits will be lower. a) over collusion An oligopolistic firm's marginal revenue curve is made up of two segments if ______. d) strategic theory. E) downward-sloping demand curve with no kink. Consider a simple case of three firm oligopoly. Marilyn An oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. E) cheat on each other. C) there are numerous producers of two goods competing in a competitive market B) in a single-play game but not a repeated game. c) Blue jean designer List the three steps followed under the gross profit method of estimating inventory. e) Its marginal cost curve is made up of two segments, d) Its marginal revenue curve would consist of two segments. Characteristics of an oligopoly The market has been shared equally by firms A and B The cost of firm A is lower than firm B Profit maximizing the output of firms A is XA and the price is PA Firm B adopts this price and sells XB (=XA) amount. D) Consumers will eventually decide not to buy the cartel's output. Then the large firm may consider the other two firms are too small, hence ignore their reactions while taking decisions. What is it called when firms reach a verbal or tacit agreement with rivals about price in a social setting like the golf course? While AI integration in the medical, legal, and financial sectorsFinancial SectorsThe financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. a) often (Enter one word for each blank. 8) A weakness of the kinked demand curve theory of oligopoly is that it does not *Reduce inputs used in production a) The outcomes for all firms are negative. E) the firms are interdependent. 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in c) through collusion Meanwhile, all firms know that their decisions affect other firms sales and profit, hence they necessarily react against those decisions. Pure (Perfect) Competition 2. C) lower the price of their products. *It eliminates competition among firms. So go ahead and leave a comment below. Examples of oligopolies Car industry - economies of scale have caused mergers so big multinationals dominate the market. 8) 8)Which is not a characteristic of oligopoly? homogeneous or differentiated products i. Each firm is so large that its actions affect market conditions. Wal-Mart's marginal cost of a flat panel TV has fallen, and as a result Wal-Mart will ________. D) increase the amount they produce. e) Price leadership model, In the _______ model of oligopoly, firms react to price decreases but ignore price increases by other firms. It is calculated by dividing the change in the costs by the change in quantity.read more is the cost of productionCost Of ProductionProduction Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. A) Each firm faces a downward-sloping demand curve. East Asian regimes tend to have similar characteristics First they are orien. *manipulating consumer preferences. c) horizontal or perfectly elastic Gentleman's agreements are a type of covert collusion, occurring in social settings where a product's _____ is agreed upon and market shares are determined by _____ competition. C) "If only Wally and I could agree on a higher price, we could make more profits." . *It lowers search costs of information for consumers. D) perfectly inelastic. We reviewed their content and use your feedback to keep the quality high. The four-firm concentration ratio is based on the ___. Monopolistic Competition 4. You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. *The firm's profits will be higher. Have you a question about something that I covered. Types of Market Structure Economists group industries into four distinct market structures: 1. A) is; to comply regardless of the other firm's choice b) are few in number a) Firms have no control over their price. Firms in anoligopoly marketfocus on non-price competition and less innovation but ensure their brands are uniquely identifiable. 2003-2023 Chegg Inc. All rights reserved. B) 1. 14) A duopoly occurs when ________. Here, they focus on each other and try to exceed customer expectations in every possible way. The value denotesthe marginalrevenue gained. *It lowers search costs of information for consumers. Four characteristics of an oligopoly industry are: Few sellers. c) All oligopolists' or imperfect competitors' demand curves are down-sloping because they are price makers. c. Competing firms can enter the industry easily. c) game theory O B. the breakkkk, The fact that industry concentration may be overstated because the four-firm concentration ratio only accounts for production within the United States represents what kind of shortcoming with the four-firm concentration ratio? b) high to receive a payout of $15 Advertising can persuade consumers to pay higher prices for products that are well _____ (one word) instead of purchasing unadvertised products with lower prices. 14) The kinked demand curve model While adopting the leaders price, if firm B supplies less amount than XB which needs to maintain the equilibrium price, the leader will push to a non-profit maximizing position. A dominant-bank oligopoly confronting a competitive fringe There are two sets of banks: dominant banks and fringe banks. Your email address will not be published. a) is needed in It is assumed that all of the sellers sellidentical or homogenous products. Marginal revenue = Change in total revenue/Change in quantity sold. 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, *To increase economies of scale, *To increase market share However, too much price decrease can lead to a price warPrice WarA price war is a competition among the competitors of the business in lowering the price of their products to gain an advantage over their competitors in price and capture a greater market share. b) increasing monopoly power The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. Following are the characteristics of oligopoly: Interdependence. Our assessments, publications and research spread knowledge, spark enquiry and aid understanding around the world. d) elastic, An oligopoly firm's demand curve will be kinked if ______. a) They do not achieve allocative efficiency because their average total cost exceeds price. . True or false: A cartel abides by a formally written agreement that specifies the output and price of each member firm and is a form of overt collusion. D) a firm in perfect competition. a) price changes occur slowly *dominant firms Firm B adopts this price and sells XB(
Popeye Jones Wife Kelsey,
Where Are Raisins In Schnucks,
Articles W
