(Pure) Monopoly 3. 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. c) Firms' advertising decisions are interdependent. What are the 4 characteristics of oligopoly? C. Some market power. A) "Gas prices in this town always go up and down together." The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. Characteristics: There are few firms in the market serving many consumers. What is it called when firms reach a verbal or tacit agreement with rivals about price in a social setting like the golf course? 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. D) increase the amount they produce. a) collusion; cartel 5.3.5 Apply Concepts of Oligopoly and Oligopoly Models .pdf. E) is; to comply when the other firm cheats and to cheat when the other firm complies. Social Studies, 22.06.2019 00:00. Pure because the only source of market power is lack of competition. *The firm's demand curve will shift further to the right. c) game theory b) Affect profits without influencing the profits of rival firms c) give the appearance of increased competition A characteristic found only in oligopolies is A) break even level of profits. c) Affect costs and influence the supply of rival firms $4. That is, the firm is myopic or short sighted not to learn from its past mistakes and take d 1 d'1, as if it will not shift. Imperfect or Differentiated Oligopoly: ADVERTISEMENTS: It is used as one of the strategies to increase the business firm's revenue and increase the market share. The characteristics of an oligopoly market or oligopolistic strategy are mentioned below: Interdependence . The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. In other words, Therefore, within the oligopoly market the "ordinary" producers must have careful preparation to follow the changes in a policy coming from the main producers. b) legal This way, Samsung and Nokia ensure non-price competition by enhancing core capabilities to build a loyal customer base. b) are few in number E) downward-sloping demand curve with no kink. D. 2021. d) The firms in the industry are interdependent. You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. e) increasing search time. *Reduce uncertainty b) are few in number Strategic independence. Oligopolists do not stress competing with each other on the pricing front. An oligopoly exists when a market is dominated by a small number of suppliers or firms. Advertising benefits society by ______. c) inflexible B) the courts. When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. d) cost leadership. What would have been DTRs debt to equity ratio if the$10 million of stock had not been b) competitively C) "If only Wally and I could agree on a higher price, we could make more profits." The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. *The firm's profits will be higher. 41) Refer to Table 15.3.12. D) is not; to comply when the other firm complies and to cheat when the other firm cheats D) zero. c) price leadership These data are as follows: 30.334.531.130.933.731.933.131.130.032.734.430.134.631.632.432.831.030.230.232.831.130.733.134.431.032.230.932.134.230.730.730.730.630.233.436.830.231.530.135.730.530.630.231.430.730.637.930.334.130.4\begin{array}{lllll}30.3 & 34.5 & 31.1 & 30.9 & 33.7 \\ 31.9 & 33.1 & 31.1 & 30.0 & 32.7 \\ 34.4 & 30.1 & 34.6 & 31.6 & 32.4 \\ 32.8 & 31.0 & 30.2 & 30.2 & 32.8 \\ 31.1 & 30.7 & 33.1 & 34.4 & 31.0 \\ 32.2 & 30.9 & 32.1 & 34.2 & 30.7 \\ 30.7 & 30.7 & 30.6 & 30.2 & 33.4 \\ 36.8 & 30.2 & 31.5 & 30.1 & 35.7 \\ 30.5 & 30.6 & 30.2 & 31.4 & 30.7 \\ 30.6 & 37.9 & 30.3 & 34.1 & 30.4\end{array} B) in a single-play game but not a repeated game. 11) Once a cartel determines the profit-maximizing price, e) Price leadership model, In the _______ model of oligopoly, firms react to price decreases but ignore price increases by other firms. The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above. For an industry to be considered an oligopoly the four-firm concentration ratio must be ______. What are three models used to study pricing and output by oligopolies? 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. Each firm faces a downward-sloping demand curve. price rigidity Element of monopoly. a) depends on the actions of rivals to price changes *Patents, *Preemptive pricing While adopting the leaders price, if firm B supplies less amount than XB which needs to maintain the equilibrium price, the leader will push to a non-profit maximizing position. *world trade xxx\underline{\phantom{\text{xxx}}}xxx. b) Demand is highly elastic below the going price A(n) _______ (Enter one word) is a market dominated by a few large producers of a homogeneous or differentiated product. E) rivalry of the participants leads to the worst solution from their point of view. E) potential entrants taking all the business away from existing firms. *To obtain lower input prices b) The number of employees in an industry who ever have or are currently working for one of the four largest firms Because of their large size and minimal competition, each firm in an oligopoly market structure influences the others. *The game would temporarily move to either cell B or cell C. 6) According to the kinked demand curve theory of oligopoly, at the quantity corresponding to the kink, the firm's Following are the characteristics of oligopoly: Interdependence. Marilyn Cox is the office manager for DTR Inc. DTR constructs, owns, and manages apartment B) equilibrium price and quantity will be insensitive to small cost changes. a) kinked and steep A) suggests that price will remain constant even with fluctuations in demand. Required fields are marked *. You are free to use this image on your website, templates, etc., Please provide us with an attribution link. *The game would eventually end in the Nash equilibrium (cell A). Have you a question about something that I covered. What are the 4 characteristics of oligopoly? When two major players dominate a sector, the market becomes a duopolyDuopolyWhen there are two market leaders in any industry or service, this is referred to as a duopoly. c) The outcomes for all firms are positive. e) through cartels, c) through product development *price elasticity of demand Oligopoly refers to a market situation or a type of market organisational in which a few firms control the supply of a commodity. B) the firms may legally form a cartel. D) "I have been spending extra on research and development of my new two-way widget." E) a cartel. If one firm is large enough to account, which is that 80% of sales in the industry. d) cheat, Which of the following represent shortcomings of the four-firm concentration ratio? Oligopoly is a market with a few firms and in which a market is highly concentrated. a) prices; uncertainty; increase Also, as there are few sellers in the market, every seller influences the behavior of the other firms and other firms influence it. Types of Market Structure Economists group industries into four distinct market structures: 1. In the graph, the price elasticity of demand is ______ below the price of P0. A study based on over 9,0009,0009,000 U. S. residents If productivity can be increased to $0.11 vans per labor hour, how many hours would the average laborer work that month? *mutual interdependence b) By increasing recruiting expenses a) The same as monopolistic competition They are d) their profits and sales will rise a) fewer firms than monopolistic competition. Marginal costMarginal CostMarginal 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. a) Import competition 5. Four characteristics of an . This market structure can be competitive and sometimes less competitive. from chapter 12 ^-^, What is the only stable outcome in a payoff matrix? Which of the following represents the problem with the four-firm concentration ratio? Pure (Perfect) Competition 2. Companies often merge to ______ monopoly power. Course Hero is not sponsored or endorsed by any college or university. The number of suppliers in a market defines the market structure. 13) A tit-for-tat strategy can be used *interindustry competition D) 2,750. That is, the large firm acts independently. Each firm is so large that its actions affect market conditions. A) there are fewer than 6 firms in a market c) costs; uncertainty; increase However, too much price decrease can lead to a price warPrice WarA price war is a competition among the competitors of the business in lowering the price of their products to gain an advantage over their competitors in price and capture a greater market share. Use the figure below to answer the following question. a) Demand is highly elastic below the going price a) The possibility of price wars diminishes and profits are maximized. An oligopolistic market exhibits the followingoligopoly features: It raises barriers for new entrants to enter into the respective sector. *To increase economies of scale, *To increase market share C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." A duopoly is d) Firms choose strategies at the same time. E) both are price takers. 5) A market with a dominant firm and with weak barriers to entry ________ in long-run equilibrium because ________. A. b) Localized markets $1. The distinctive feature of an oligopoly is interdependence. Typically, this means that at least 40% of the market is controlled by a few firms. B) assumes marginal cost is constant. E) Each firm has an incentive to cheat. Determinants of Price Elasticity of Supply. d) straight and steep Which scenario describes a simultaneous game? b) Mutual interdependence b) it will lower the firm's costs What are the 4 characteristics of oligopoly? Mutual interdependence solely means that they base their decisions on how they think their rivals will react. c) An outcome in the payoff matrix from which neither firm wants to deviate since the current strategy is optimal given the rival's strategic choice.
