Pearson eText Microeconomics -- Instant Access (Pearson+)
9th Edition
ISBN: 9780136879572
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON+
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Question
Chapter 13, Problem 1E
To determine
Repetitions and collusive outcomes
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In a Nash - Cournot equilibrium, does an oligopolistic firm produce at less than full capacity, full capacity, or more than
full capacity? Explain.
Product differentiation is an essential characteristic of oligopolistic market structures.do you agree ?explain
Should competitors work together in an oligopolistic market?what is it called if they do,and is it legal?
Chapter 13 Solutions
Pearson eText Microeconomics -- Instant Access (Pearson+)
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- The kinked oligopoly demand curve is a result of the assumption by an oligopolist that a. price increases will be matched, but price reductions will not. b. price increases will not be matched, but price reductions will. c. both price increases and price reductions will be matched. d. neither price increases nor price reductions will be matched.arrow_forwardWhy might price collusion occur in oligopolistic industries? Assess the economic desirability of collusive pricing. What are the main obstacles to collusion? Speculate as to why price leadership is legal in the United States, whereas price-fixing is not.arrow_forwardWhat happens if either formally or informally, oligopoly firms work together and hold to their agreements? Group of answer choices Profits can be maximized by increasing output and increasing the price of goods and services. Profits can be minimized by decreasing output and increasing the price of goods and services. Profits can be maximized by decreasing output and increasing the price of goods and services.arrow_forward
- If Gulfstream and Bombardier, both producers of upscale jet airplanes, were to collude rather than compete, consumers could expect: Group of answer choices A) higher prices and higher quantities offered for sale. B) higher prices and lower quantities offered for sale. C) one firm to emerge as the price leader in the oligopoly. D) lower prices and lower quantities offered for sale. E) each firm to cheat on the cartel agreement.arrow_forwardIn a non-collusive oligopoly if one firm increased its price what would the other firms likely do? What about a price decrease? How is this related to a kinked demand curve?arrow_forwardThe beer manufacturing industry in the U.S. includes dozens of independent firms. Yet the American beer industry is regarded as one of the most oligopolistic industries in the country. Why is this?arrow_forward
- When we say that firms within an oligopoly structure have the temptation to "cheat" in order to gain profits, this means theyarrow_forwardIn Malaysia, there are only a few firms in the telecommunication industry such as Maxis, Digi, and Celcom. By the theory of economics, this situation is called an oligopoly. Oligopoly, a market dominated by a few large firms of a homogeneous or differentiated product. Explain how the price and output affect the production decision of the individual oligopolist.arrow_forward
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