Businesses in such a market collaborate to dominate the rest of the players and maximize joint revenue. This market structure can be competitive and sometimes less competitive. c) its rivals ignore price increases and price decreases 7) Why might only a few firms dominate an oligopolistic industry? Welcome to EconTips, your number one source for all things about economics. The firms produce differentiated products. *Ownership and control of raw materials B)Firms set prices. c. Competing firms can enter the industry easily. E) none of the above. E) All of the above. Furthermore, no restrictions apply in such markets, and there is no direct competition. It also means that each firm must be aware of the reaction of others to their actions. The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. D) increase the amount they produce. An oligopoly is a market structure that involves few producers and suppliers (www.oecd.org). a) The possibility of price wars diminishes and profits are maximized. A small number of sellers. d) straight and steep Is Microsoft an oligopoly Do you want to know Click Here. It includes decisions made in concentrated markets, such as product prices, quality standards, and production planning. B) neither player would be willing to change his or her decision unless the other player also changes his or her decision. Mr. mann's science students were experimenting with speed. D)There is more than one firm in the industry. *It helps reduce demand for material products. b) flexible c) may be less desirable because they are not regulated by government to protect consumers Which of the following is not a characteristic of oligopoly? After each player chooses his or her best strategy and sees the result, Answers: 1 Show answers Another question on Social Studies. It determines the law of demand i.e. *increasing economies of scale, *providing misleading information 9) Which isnota characteristic of oligopoly? B) there are two producers of two goods competing in an oligopoly market Marginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. Since there are few dominating firms which are having full knowledge about the market, the decisions on the price and output of a firm depend on the reactions of other firms. E) 10,000. b) are less efficient because they are often regulated by the government a) price changes occur slowly c) competition You are free to use this image on your website, templates, etc., Please provide us with an attribution linkHow to Provide Attribution?Article Link to be HyperlinkedFor eg:Source: Oligopoly (wallstreetmojo.com). A) all members of the cartel have a strong incentive to abide by the agreed-upon price. Select one: O a. there are a few firms that are mutually interdependent O b. when one firm in an oligopoly raises its price, other firms will follow O c. firms may collude in order to act like a monopoly O d. barriers to entry exist to limit the entrance of new firms E) A and C. 8) A merger is unlikely to be approved if ________. How oligopolists react to the price change by one firm can be best understood with the downward-sloping Kinked demand curve. 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 . a) The outcomes for all firms are negative. A) costs, prices, profit, and strategies. Consequently, the sales of the other firm will be definitely reduced by the same percentage. from chapter 12 ^-^, What is the only stable outcome in a payoff matrix? C) average total cost. d) its rivals match both a price cut and price increase, b) its rivals match a price cut but ignore a price increase, When members of an oligopoly meet to set prices to maximize profits it demonstrates the ______ and/or the ______ model. 2003-2023 Chegg Inc. All rights reserved. But the other firms act considering the interdependence. Thus, the land is worth It continues to behave on the assumption that its new demand (d 1 d' 1 ) will not shift further because the effect of its own decisions on other sellers' demand would be negligible. d) through advertising East Asian regimes tend to have similar characteristics First they are orien. They do so through collusion that results in higher prices and fewer production or product choices for customers. e) Its marginal cost curve is made up of two segments, d) Its marginal revenue curve would consist of two segments. 6) Which one of the following characteristics applies to oligopolistic markets? You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. The core competencies in business refer to its resources and unique fundamental capabilities that distinguish it from market competitors. 1) A cartel is a group of firms which agree to A) behave competitively. Oligopoly. b) Collusive pricing model d) The percentage of industries that are dominated by a group of four or fewer firms, c) The percentage of total industry sales accounted for by the four largest firms, What term means "cooperation with rivals?" 1. (Figure) summarizes the characteristics of each of these market structures. a) necessary B) unit elastic. Products traded or traded homogeneously become the second characteristic of oligopoly. D) firms in perfect competition. In a(n) _____ game one firm moves first, committing to a strategy and then the rival firm responds. That is, the large firm acts independently. b) demand; losses; increase B) both can earn an economic profit in the long run. The control of oligopolists over specialized inputs, such as resources, price, and production, makes it difficult for a new firm to survive. So go ahead and leave a comment below. D) Bud has a dominant strategy but Miller does not. C) Dr. Smith advertises only if Dr. Jones doesn't advertise. O D. Some barriers to entry. d) elastic, An oligopoly firm's demand curve will be kinked if ______. It helps avoid the potential price war and price rigidity. c) harder d) Mutual interdependence. B) Firms are profit-maximizers.C) The sales of one firm will not have a significant effect on other firms. It encompasses several industries, including banking and investment, consumer finance, mortgage, money markets, real estate, insurance, retail, etc.read more is in progress, the automobile industry has already introduced AI-powered self-driving cars. Which of the following is not a characteristic of oligopoly? 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. 18) A market with a single firm but no barriers to entry is known as The profit-maximizing price of firm B is PB(>PA) and the quantity is Xbe. *manipulating consumer preferences 6. It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. d) Firms choose strategies at the same time. a) Firms have no control over their price. a) inelastic The more concentrated a market is, the more likely it is to be oligopolistic. b) Interindustry competition b) increasing monopoly power 0. Economies of scale are the cost advantage a business achieves due to large-scale production and higher efficiency. Hence, undoubtedly it will react to the price reduction decision. C) one prisoner has no chance to be acquitted since there is no other prisoner to support his testimony. Demand and cost differences, the number of firms in the industry, and the potential for cheating all represent _____ (one word) to collusion. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. C) average variable cost curve is discontinuous. D) Gear cheats, while Trick complies with the agreement. 13) A tit-for-tat strategy can be used Advertising can reduce efficiency by ______. E) Bud and Miller each have a dominant strategy. 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. d) achieve greater allocative efficiency but lesser productive efficiency, c) give the appearance of increased competition Price collusion caused by market transparency and other factors enables oligopolists to raise their barriers to market entry for new competitors, such as high capital requirements, legal obligations, and consumer loyalty. B) "I am producing more widgets than Wally and I agreed to in our talk last week." e) It could be downward sloping or kinked. 11) Because an oligopoly has a small number of firms, A) each firm can act like a monopoly. Share with Email, opens mail client a) gentleman's agreement 1. d) Interindustry competition, Which are barriers to entry in both monopolies and oligopolies? C) the HHI for the industry is small. Oligopolistic behavior implies that oligopolists prefer competition ______. b) strengthens What are the 4 characteristics of oligopoly? d) Its marginal revenue curve would consist of two segments d) have interdependent pricing. C) independence of firms. CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. B. $4. Firms are profit-maximizers. In these characteristics, manufacturers usually only produce and sell one product. It is assumed that all of the sellers sellidentical or homogenous products.read more, monopoly, and monopolistic competition. B) the firms may legally form a cartel. *world trade So when an oligopolist decreases prices to increase output, others follow the path. Greater the number of firms, the higher the degree of interdependence. East Asian regimes tend to have similar characteristics First they are orien. e) undefined, In the graph, the price elasticity of demand is highly ______ above the price of P0. However, the cartel system is fragile and considered illegal in many parts of the world as it includes increased technical and quality standards, mutually agreed pricing or price-fixingPrice-fixingPrice 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.read more, etc. C) The sales of one firm will not have a significant effect on other firms. E) an outcome. In a monopoly, only one big brand influences the entire market without any competition. Strategic independence. a) They move downward and to the right to a lower operating point on the average-total-cost curve. They do it strategically so they do not lose their customers in what could be a price war. C) is; to cheat regardless of the other firm's choice *interindustry competition B) This game has no Nash equilibrium. Demand Curve is a graphical representation of the relationship between the prices of goods and demand quantity and is usually inversely proportionate. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. The total market demand is P(Q) = 50 - 2Q, where Q is the total quantity produced by all (active) firms in the industry. 31) Refer to Table 15.3.7. a) The possibility of price wars diminishes and profits are maximized. A) the government will impose price controls. D) a firm in perfect competition. E) a cartel. Principles of Microeconomics Instructor: Sandhya Patlolla Assignment 7 1) In two firm oligopoly, if one firm increases its price, then the other firm can: A. A) collusion of the participants leads to the best solution from their point of view. *speeding up technological progress c) conveying information to consumers You are free to use this image on your website, templates, etc., Please provide us with an attribution link. . Firms are more likely to cheat on a collusive agreement when the economy is experiencing a _____ (Enter one word). a) They may produce homogeneous or differentiated products. In an oligopoly, dominant market players are influential enough to decide on the price of products and services.

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