ratio. An oligopolistic firm's marginal revenue curve is made up of two segments if ______. C) average total cost. B) "I am producing more widgets than Wally and I agreed to in our talk last week." Why is collusion desirable to oligopolistic 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 single b) Affect profits without influencing the profits of rival firms C) Parliament. e) straight. 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). The firm and market structures - My Conquest Is the Sea of Stars 11) Because an oligopoly has a small number of firms. It encompasses several industries, including banking and investment, consumer finance, mortgage, money markets, real estate, insurance, retail, etc. A) average total cost curve is discontinuous. What kind of problem does this represent with the four-firm concentration ratio? As their products seem visually identical, both the brands have to make sure they offer customers something that the other does not. D) the industry is government regulated A) kinked demand curve. c) Dominant firms D) perfectly inelastic. What are the 4 characteristics of oligopoly? E) an oligopoly. a. a) fewer firms than monopolistic competition. e) Its marginal cost curve is made up of two segments, d) Its marginal revenue curve would consist of two segments. 4. 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in 6. Production Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. D) entry into the industry of rival firms will have no impact on the profit of the cartel. 9) Which isnota characteristic of oligopoly? D. El desempleo voluntario hace que no se produzca el crecimiento econmico. A) "Gas prices in this town always go up and down together." However, at this price profit of firm B is not maximized.The profit-maximizing price of firm B isPB (>PA) and the quantity is Xbe (Solved Which of the following is not a characteristic of an - Chegg Types of Market Structure Economists group industries into four distinct market structures: 1. E) an outcome. b) Its demand curve is downward-sloping Barriers to entry. c) its rivals match a price increase but ignore a price cut E 12) Because an oligopoly has a small number of firms A) each firm can act like a monopoly. B) unit elastic. A) Each firm has an incentive to collude. You are free to use this image on your website, templates, etc., Please provide us with an attribution link. In December, General Motors produced 6,600 customized vans at its plant in Detroit. See more documents like . A) "Gas prices in this town always go up and down together." Which of the following are characteristics of oligopolistic markets A) there are only two producers of a particular good competing in the same market Firm B adopts this price and sells XB(Final Exam Study - Oligopoly And Game Theory ECON ECO-FINALS_LESSON-1 - Read online for free. B) of barriers to entry. c) Affect costs and influence the supply of rival firms C) a perfectly competitive market. This way, Samsung and Nokia ensure non-price competition by enhancing core capabilities to build a loyal customer base. E) Bud and Miller each have a dominant strategy. PDF Market Structure: Oligopoly (Imperfect Competition) 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? marginal cost pricing The joining of firms that are producing or selling a similar product is a horizontal merger Suppose an industry has total sales of $25 million per year. c) it will prevent a price war Use the figure below to answer the following question. 16) The firms Trick and Gear form a cartel to collude to maximize profit. d) cost leadership. d) does not influence. C) lower the price of their products. $3. B) a monopoly. A) collusion of the participants leads to the best solution from their point of view. If the products of the firms are homogeneous then the interdependence will tend to be strong because of the perfect substitutability of the products of the firms. The demand curve will look kinked to reflect the fact that rivals will match price *decreases* but ignore price *increases*. *Cause price wars during business recessions Oligopoly: Definition, Characteristics & Examples | StudySmarter *localized markets, *dominant firms Which of the following is not a characteristic of oligopoly? read more, market demand, and product differentiationProduct DifferentiationProduct differentiation refers to making a product look attractive and different from other products in the same class. e) Firms may sell a differentiated product. 30.331.934.432.831.132.230.736.830.530.634.533.130.131.030.730.930.730.230.637.931.131.134.630.233.132.130.631.530.230.330.930.031.630.234.434.230.230.131.434.133.732.732.432.831.030.733.435.730.730.4. A) rules b) upward-sloping Share with Email, opens mail client Economies of scale are the cost advantage a business achieves due to large-scale production and higher efficiency. 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. c) price leadership; cartel Oligopolies are typically composed of a few large firms. C) is; to cheat regardless of the other firm's choice In such a system, determining the proportion of total product used for investment . C) strategies b) There are barriers to entry into the market. A) costs, prices, profit, and strategies. E) cheat on each other. What are the 4 characteristics of oligopoly? Though, it is rare to find pure oligopoly situation, yet, cement, steel, aluminum and chemicals producing industries approach pure oligopoly. Oligopolies exist and do not attract new rivals because A) of competition. B) monopolists. The total market demand is P(Q) = 50 - 2Q, where Q is the total quantity produced by all (active) firms in the industry. Short run equilibrium in monopolyPerfect Competition: Definition, Graphs, short run, long runTop 5 characteristics of an oligopolyMonopoly Price discrimination: Types, Degrees, Graphs, ExamplesDifferent Types of Monopolies| 7 TypesMonopolistic competition assumptionsMonopolistic Competition Equilibrium| Long-run| Short-runMonopolistic Competition and Economic Efficiency. b) Mutual interdependence The equilibrium ________ a dominant strategy equilibrium because the strategy in this game is for a firm ________. And that is what turns out to be the unique selling proposition (USP) of the respective brands in the oligopolistic industry. 16) A monopolistically competitive firm is like an oligopolistic firm insofar as A) both face perfectly elastic demand. d) through advertising Segn Ricardo no es posible que exista equidad en el mercado debido a que: A. As a result, each firm obligates to adhere to pre-determined price and quantity/output levels to maximize revenue. *The firm's profits will be lower. 14) A duopoly occurs when ________. B) the firms may legally form a cartel. Marilyn 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. D) There is more than one firm in the industry. They are *Reduce inputs used in production Answered: Consider a Cournot oligopoly with n = 2 | bartleby When firm X increases its price. C) both have MR curves that lie beneath their demand curves. b) Collusive pricing model Hence, undoubtedly it will react to the price reduction decision. 41) Refer to Table 15.3.12. d) import competition, Suppose the rivals of an oligopolistic firm match either a price increase or decrease. So when an oligopolist decreases prices to increase output, others follow the path. d) strategic theory. c) regulated monopoly E) produce the efficient quantity. B) in a single-play game but not a repeated game. Economics questions and answers. B) other firms will lower theirs. Based on her experience with past negotiations, Marilyn knows that lenders are concerned about DTRs debt to equity 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. In second-degree price discrimination the monopolist offers a menu of quantity-based pricing options designed to induce customers to self-select based on how highly they value the product. D) is not; to comply when the other firm complies and to cheat when the other firm cheats It also means that each firm must be aware of the reaction of others to their actions. 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. c) The percentage of total industry sales accounted for by the four largest firms C. Some market power. D) assumes that competitors will match price cuts and ignore price increases. read more curve results in a convex bend, known as kink. d) The firms in the industry are interdependent. A) potential entrants entering and making monopoly profit. The factors that determine a market structure include the number of businesses, control over prices, and barriers to market entry. B) "Every time Sparrow's Donuts has a donut sale, so does Tim Horton's." The profit-maximizing price of firm B is PB(>PA) and the quantity is Xbe. 11) Once a cartel determines the profit-maximizing price, c. Competing firms can enter the industry easily. d) By updating manufacturing equipment, What is the four-firm concentration ratio? Required fields are marked *. A) is; to comply regardless of the other firm's choice as the price increases, demand decreases keeping all other things equal. B) a contestable market. b) greater than or equal to 50% *Patents, Which are reasons that that firms merge? The distinctive feature of an oligopoly is interdependence. The firms comprise an oligopolistic market, making it possible for already-existing smaller businesses to operate in a market dominated by a few. Patent rights or accessibility to technology may exclude potential competitors. As in an oligopoly market, the decision of one firm influences the process and working of another firm. A) Each firm faces a downward-sloping demand curve. b) kinked demand The market has been shared equally by firms A and B, The cost of firm A is lower than firm BProfit maximizing the output of firms A is XA and the price is PA. Firm B adopts this price and sells XB(=XA) amount. a) price leadership What does a demand curve look like for an oligopolistic firm? Non-Collusive Oligopoly-Sweezy's Kinked Demand Curve Model (Price-Rigidity) Usually, in Oligopolistic markets, there are many price rigidities. *The firm's demand curve will shift further to the left. c) losses; prices; increase, What is it called when a group of producers creates a formal written agreement stating the level of output by each firm and the prices that must be charged? It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. Oligopoly. 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? C) assumes that marginal revenue equals marginal cost only at the quantity at the "kink." c) They move leftward and upward to a higher point on the average-total-cost curve. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. C) independence of firms. D) firms in perfect competition. *To increase economies of scale, *To increase market share Firms in the industry make price and output decisions with an eye to the decisions and policies of other firms in the industry. land back or when DTRs debt to equity position improves, what should she do? *The firm's profits will be lower. The payoffs in the table are the economic profit made by Bud and Miller. Monopolists are not allocatively efficient, because they do not produce at the quantity where P = MC. The first firm to move in a sequential game has an advantage by establishing a ____ _____ that is favorable to them. Solved . Which of the following is not a characteristic - Chegg A firm in an oligopolistic market ______. Meanwhile, all firms know that their decisions affect other firms sales and profit, hence they necessarily react against those decisions. 6) Which one of the following characteristics applies to oligopolistic markets? A. firms have no control over their price B. firms may sell a differentiated product C. firms have market power D. firms may sell a standardized product E. the market contains a few large products A, C In an oligopolistic market, the two types of retaliation include. 7) Why might only a few firms dominate an oligopolistic industry? d) are more efficient because cartels and collusion is always successful what are the 5 characteristics of an oligopoly? That is, the large firm acts independently. debt to equity ratio and that it will be reversed whenever the presidents friend wants the b) u-shaped East Asian regimes tend to have similar characteristics First they are orien. In a(n) _____ game one firm moves first, committing to a strategy and then the rival firm responds. a) Dominant strategy $1. c) It will always be kinked because it is a price maker. O D. Some barriers to entry. 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. . Also, as there are few sellers in the market, every seller influences the behavior of the other firms and other firms influence it. As a result, monopolists produce less, at a higher average cost, and charge a higher price than would a combination of firms in a perfectly competitive industry. Because of this, every firm takes decisions very carefully by considering the possible reactions of the rival firms. However, DTR does not intend to build any single family homes. a) gentleman's agreement For an industry to be considered an oligopoly the four-firm concentration ratio must be ______. 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. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. ECON Chapter 11: Imperfect Competition and Factor Markets - Quizlet c) conveying information to consumers Their differences can range from. B) 1. C) other firms will raise their prices by an identical amount. The number of suppliers in a market defines the market structure. 2. It is an essential component of marketing strategy leading to brand recognition and business growth. d) It will always be U-shaped. b. command economy | Definition, Characteristics, Examples, & Facts oligopoly, monopoly, monopolistic competition, pure competition pure competition, monopolistic competition, oligopoly, monopoly. Oligopoly: Types and Features - GeeksforGeeks Which of the following is characteristic of oligopoly, but not of monopolistic competition? A) is; all other firms act as if they are perfectly competitive B) is not; other firms can enter, which increases supply, decreases the price, and drives economic profit down to zero The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. A) suggests that price will remain constant even with fluctuations in demand. B) Firms are profit-maximizers.C) The sales of one firm will not have a significant effect on other firms. Which of the following is not a characteristic of an oligopoly? d) Its marginal revenue curve would consist of two segments d) lowering the cost of production Oligopoly as a market structure is distinctly different from other market forms. a) It could be downward or upward sloping. A) raise the price if marginal revenue increases B) lower the price if the new marginal cost curve lies below the break in the marginal revenue curve C) definitely lower the price D) not change the price E) raise the price if other firms raise their prices. The control of oligopolists over specialized inputs, such as resources, price, and production, makes it difficult for a new firm to survive. *increasing economies of scale, *providing misleading information The existence of oligopoly requires that a few firms are able to gain significant market power, preventing other, smaller competitors from entering the market. Any decision taken by a firm in order to increase its sales would adversely affect the sales and hence profit of the other firms. E) None of the above. d) They do not achieve allocative efficiency because their price exceeds marginal cost. Pure because the only source of market power is lack of competition. 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? Which is not a characteristic of oligopoly a each - Course Hero Thus, it induces interdependence in the network. Thus, each firm gains a considerable market share with minimal potential profits. E) A and C. 8) A merger is unlikely to be approved if ________. A) a market where three dominant firms collude to decide the profit-maximizing price. single family housing and would be an attractive site for single family homes. D) neither is protected by high barriers to entry. Oligopoly Characteristics: 4 Important Characteristics of Oligopoly What is Oligopoly? | Markets | Economics - Economics Discussion 13) Complete the following sentence. D) monopolistic competition. The presidents friend constructs and sells single family homes. A. D) its profit will rise by the same percentage. C) if Jane does not change her decision, Bob would like to change his. c) is always downward sloping The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above. This has been a Guide to Oligopoly and its definition. *It helps reduce demand for material products. d) their profits and sales will rise 10) In the dominant firm model of oligopoly, the dominant firm produces the quantity at which marginal revenue equals Let us consider the followingexamplesto understand the concept better: Samsung and Nokia are two big players in the Android smartphones industry, with the former trying to capture the market by keeping the price lenient. a) The possibility of price wars diminishes and profits are maximized. C) in a repeated game but not a single-play game. Chapter 15: Oligopoly Flashcards | Quizlet 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) over collusion D)There is more than one firm in the industry. d) achieve greater allocative efficiency but lesser productive efficiency, c) give the appearance of increased competition $6. There are just several sellers who control all or most of the sales in the industry. B) marginal cost curve is discontinuous. a) depends on the actions of rivals to price changes How oligopolists react to the price change by one firm can be best understood with the downward-sloping Kinked demand curve. C) Miller has a dominant strategy but Bud does not. Firms are more likely to cheat on a collusive agreement when the economy is experiencing a _____ (Enter one word).