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In an oligopolistic market there are many buyers. few buyers. few sellers. many sellers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In an oligopolistic market there are

many buyers.

few buyers.

few sellers.

many sellers.

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Which of the following may characterize oligopolistic behavior? a) Mutual inter-dependence. b) Collusion c) Cheating. d) High concentration ratios e) All of the above.
Please label the scenarios with the term that best matches them. Bauer and CMM are duopolists in the hockey skate market. Suppose every year Bauer produces one million pairs of skates. CMM produced one million skates the first year but has since chosen to produce 1.5 million pairs of skates each year. Unilever and Proctor & Gamble are fined 315 million euros for price-fixing the washing detergent market in Europe. Zyrtec, Allegra, and Claritin, antihistamines used frequently for allergies, place ads on TV promoting the superiority of their drug. At the beginning of a new year, Canon displays the prices for its newest line of camera lenses. Nikon, Sigma, and Tamaron, other camera makers, follow with their prices soon after, set near Canon's prices. Sprint, AT&T, and T-Mobile keep undercutting each other's prices in order to gain a larger customer base. none of these terms antitrust policy Answer Bank Nash equilibrium non-price competition price war price leadership CUCU
A unique feature of an oligopolistic industry is Multiple Choice low barriers to entry. standardized products. diminishing marginal returns. mutual interdependence.
In a Nash - Cournot equilibrium, does an oligopolistic firm produce at less than full capacity, full capacity, or more than full capacity? Explain.
Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q₁. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose q2 and 93, respectively. Market demand is given by p(Q) = 100 – Q, and Q = 9₁ +9₂ +93. Firm 1's costs are c₁ (9₁) = 1q₁, firm 2's costs are c₂(9₂) = 6q2 and firm 3's costs are C3(93) = 693. Starting from the end of the game, you can express Firm 2's best response function in terms of 9₁ and 93, and you can similarly express Firm 3's best response function in terms of q₁ and q₂. Using these, answer the following questions. a) If Firm 1 chooses q₁ = 9, what quantity will Firm 2 choose? b) If Firm 1 chooses q₁ = 100, what quantity will Firm 2 choose? c) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?
Oligopoly is the other form of imperfect competition. In this case the scale tilts more in favor of monopoly power. In Oligopoly there are a few large firms in the industry. These firms have considerable economic power. Oligopoly is a market structure found in all parts of the modern world. When oligopolistic firms get together formally it is known as a cartel, define and explain how cartels operate and provide reasons for their possible failure. Use relevant examples.
An oligopolistic market structure is distinguished by several characteristics, one of which is difficult entry. What are some other characteristics of this market structure? Check all that apply. Market control by many small firms a) Market control by a few large firms b) Mutual interdependence c) Mutual dependence d) Either similar or identical products
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Price maker firm exists in oligopoly market structure
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Price leadership represents a situation where oligopolistic firms Multiple Choice reduce their reliance on nonprice competition. form a cartel. face a kinked demand curve. tacitly collude.