c) Firms earn zero economic profits in the long-run. B) Other firms will enter the industry. It is assumed that all of the sellers sellidentical or homogenous products.read more, monopoly, and monopolistic competition. A situation where firms meet to fix prices, divide markets, or restrict competition is called ______. E) downward-sloping demand curve with no kink. B) 1. E) other firms will not raise theirs. Why is collusion desirable to oligopolistic firms? Oligopoly. D) its profit will rise by the same percentage. However, at this price profit of firm B is not maximized. Monopolistic Competition 4. c) Dominant firms a) payoff What kind of problem does this represent with the four-firm concentration ratio? Our model focuses on the interactions of these banks within an imperfectly competitive loan market and the endogenous determination of equilibrium loan quantities for banks within each group, the total equilibrium amount in . 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. We are dedicated to providing you with the very best in economics knowledge, with an emphasis on microeconomics and macroeconomics. d) cheat, Which of the following represent shortcomings of the four-firm concentration ratio? What kind of game is it when firms choose their optimal pricing strategy today without worrying about possible interactions in the future? c) Localized markets A monopoly occurs when. Pure (Perfect) Competition. read more curve results in a convex bend, known as kink. D) A and B. C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." C) average total cost. It is used as one of the strategies to increase the business firm's revenue and increase the market share. 1) The market structure in which natural or legal barriers prevent the entry of new firms and a small number of firms compete is, 2) Suppose that industry A consists of four firms who collectively control 96 percent of total sales in the market. a) Cartel You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Compared to pure monopolies, oligopolies ______. For an industry to be considered an oligopoly the four-firm concentration ratio must be ______. Brand reputation, company size, and minimal completion make decision-making crucial and influential across the group. When the number of firms in an oligopolistic industry increases from 3 to 10, it is ______ to collude. A study based on over 9,0009,0009,000 U. S. residents A) collusion of the participants leads to the best solution from their point of view. C) the firms keep profits and prices so low that no rivals are . As a result, each firm obligates to adhere to pre-determined price and quantity/output levels to maximize revenue. b) Localized markets b) are few in number What is it called when firms reach a verbal or tacit agreement with rivals about price in a social setting like the golf course? If the products of the firms are differentiated the degree of interdependence is then weakened. *mutual interdependence b) product development and advertising are relatively difficult to copy e) through cartels, c) through product development 10) In the dominant firm model of oligopoly, the dominant firm produces the quantity at which marginal revenue equals Monopolistic Competition and Economic Efficiency, Monopolistic Competition Equilibrium| Long-run, Short-run, What is Inflation Mean | Definitions, Types, Causes, How to Calculate the GDP [Definition & Formula], Main Theories of Inflation (With Diagram), Indifference Curve Q&A [Download Indifference Curve Pdf]. A) equilibrium price and quantity will be sensitive to small cost changes. $4. 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. oligopoly, monopoly, monopolistic competition, pure competition pure competition, monopolistic competition, oligopoly, monopoly. 13) A tit-for-tat strategy can be used Oligopolistic firms do which of the following when they change their pricing strategies? Oligopolyis a market structure E) both are price takers. If a firm assumes that its rivals will match all price changes, but the firm's rivals actually charge a lower price what are the potential consequences? Collusion becomes more difficult as the number of firms ____. d) greater than or equal to 60%, How can oligopolistic firms influence their profits and the profits of their rivals? a) Its demand curve is downward-sloping 6) Wal-Mart follows the kinked demand curve model of oligopoly. C) there are numerous producers of two goods competing in a competitive market Barriers to entry into an oligopoly most resemble those of a ______. The key characteristics of an oligopoly market structure include: Few firms : There are only a few firms in the market, which makes it easy for the firms to coordinate their behavior and to reach . e) It could be downward sloping or kinked. Oligopoly is an important form of imperfect competition. Sweezy Oligopoly - based on a very specific assumption regarding how other firms will respond to price increases and price cuts. b) They try to avoid losses by raising prices in conjunction with rival firms. A) is; to comply regardless of the other firm's choice C) lower the price of their products. They may produce homogeneous products or differentiated products. Pure because the only source of market power is lack of competition. C) firms in monopolistic competition. Also, they rely on free-market forces to earn higher profits than a competitive market. In the credit card industry, for example, Visa and MasterCard have a duopoly. B) a contestable market. 12) Because an oligopoly has a small number of firms D) assumes that competitors will match price cuts and ignore price increases. Here, they focus on each other and try to exceed customer expectations in every possible way. d) They do not achieve allocative efficiency because their price exceeds marginal cost. Barriers to entry. For example, it has been found out that insulin and the electrical industry are highly oligopolist in the US. Which scenario describes a simultaneous game? e) undefined, In the graph, the price elasticity of demand is highly ______ above the price of P0. However, firm B follows the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. Which of the following is not a characteristic of an oligopoly? B) collusion C) one prisoner has no chance to be acquitted since there is no other prisoner to support his testimony. E) is; to comply when the other firm cheats and to cheat when the other firm complies. D) payoffs A duopoly is Firm B adopts this price and sells XB( Paul Germain Columbus, Ohio,
Greg Miller Utah Net Worth,
Articles W
Categories