A firm in an oligopolistic market ______. The marginal revenue formula computesthe change in total revenue with more goods and units sold." *dominant firms C. Some market power. D) the one producer of two goods sells the goods in a monopoly market Why is collusion desirable to oligopolistic firms? *It enhances competition and reduces monopoly power. a) kinked and steep Your email address will not be published. A Computer Science portal for geeks. A) kinked demand curve. 0. d) can set its price and output to maximize profits. The first firm to move in a sequential game has an advantage by establishing a ____ _____ that is favorable to them. d) Interindustry competition, Which are barriers to entry in both monopolies and oligopolies? bc it's similar to monopoly but has the difference of having more firms lol. a. small number of firms b. has some pricing power c. the firms are interdependent d. the good produced may be unique or not e. low barriers to entry; Which of the following is not a characteristic of an oligopolistic market structure? However, DTR does not intend to build any single family homes. Oligopoly is said to prevail when there are few firms or sellers in the market producing or selling a product. *mutual interdependence d) their profits and sales will rise d) It will always be U-shaped. 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 . C. Some market power. The distinctive feature of an oligopoly is interdependence. Patent rights or accessibility to technology may exclude potential competitors. c) threatens Our assessments, publications and research spread knowledge, spark enquiry and aid understanding around the world. It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. (Enter one word for each blank. C) equilibrium price will be sensitive to small cost changes but quantity will not. C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." d) have interdependent pricing. 5. A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating. Lets identify the oligarchy before identifying the characteristics of an oligopoly. Libertyville has two optometrists, Dr. Smith and Dr. Jones. d) The market contains a few large producers. Oligopolists do not stress competing with each other on the pricing front. One of theoligopoly characteristicsis the focus of its members on improving the product quality or offering benefits to make their brand unique. The concentration ratio measures the market share of the. D) its profit will rise by the same percentage. The point at which an upward-sloping marginal cost curve intersects a downward-sloping marginal revenueMarginal RevenueThe marginal revenue formula computesthe change in total revenue with more goods and units sold." D) "I have been spending extra on research and development of my new two-way widget." A market is deemed oligopolistic or extremely concentrated when it is shared between a few common companies. c) They move leftward and upward to a higher point on the average-total-cost curve. e) through cartels, c) through product development 18) A market with a single firm but no barriers to entry is known as An oligopoly is a market structure where a few large firms collude and dominate a particular market segment. *To obtain lower input prices The most important model of oligopoly is the Cournot model or the model of quantity competition. For example, the existing firms might threaten to reduce the price drastically if entry occurs. d) import competition, Suppose the rivals of an oligopolistic firm match either a price increase or decrease. What are the positive effects of large oligopolists advertising? A type of implicit understanding used by oligopolists to coordinate prices without engaging in outright collusion is known as ______. Oligopolistic behavior implies that oligopolists prefer competition ______. E) None of the above. 6. price changes, not production costs, so it can't be b. Mutual interdependence solely means that they base their decisions on how they think their rivals will react. D) There is more than one firm in the industry. Based on the figure, if RareAir honors an agreement with Uptown to price high, and Uptown needs to increase profits due to stockholder pressure, Uptown will price ______. That means higher the price, lower the demand. Economics questions and answers. b) Its demand curve is downward-sloping $15. b) upward-sloping What is the Nash equilibrium? Marilyn Cox is the office manager for DTR Inc. DTR constructs, owns, and manages apartment OA. The group that colludes is referred to as a cartelCartelA cartel is a group of producers of goods or suppliers of services formed through an agreement amongst themselves to regulate the supply of goods or services with the basic intent to illegally regulate the prices or restrict competition regarding the said goods or services.read more. *To obtain lower input prices It is used as one of the strategies to increase the business firm's revenue and increase the market share.read more. d) vertical 13) Complete the following sentence. B) a market where two firms compete for profit and market share. a) pricing theory d) strategic theory. Their differences can range from. A) specify the technology of production. What happens to oligopolistic firms when a recession occurs? 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, *The firm is failing to produce at the profit-maximizing output. D) the four-firm concentration ratio for the industry is small. 4) Which one of the following industries is the best example of an oligopoly? The profit-maximizing price of firm B is PB(>PA) and the quantity is Xbe. The presidents friend constructs and sells single family homes. A) each firm can act like a monopoly. Required fields are marked *. (Pure) Monopoly 3. A small number of sellers. When this structure is in place for an economy, then only a small number of producers, distributors, and sellers interact with the customer base to distribute items. View full document. A) Each firm faces a downward-sloping demand curve. c) The outcomes for all firms are positive. See more documents like . *The game would temporarily move to either cell B or cell C. C) the HHI for the industry is small. B) the firms may legally form a cartel. A) is; to comply regardless of the other firm's choice ENGL1190_V0854_2023WI_Communications23.docx. c) costs; uncertainty; increase 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. In the scenario above, the market is. d) are more efficient because cartels and collusion is always successful *interindustry competition The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above. a) increasing firm profits ), Which of the following is true about the oligopolist if rivals match a price cut but ignore a price increase? b) They try to avoid losses by raising prices in conjunction with rival firms. For example, when a government grants a patent for an invention to one firm, it may create a monopoly. 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. When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. *It lowers search costs of information for consumers. d) price changes are often difficult to match Each firm is so large that its actions affect market conditions. C) Firms in the cartel will want to raise the price. A) a firm in an oligopoly market. D) Dr. Smith advertises only if Dr. Jones advertises. What kind of problem does this represent with the four-firm concentration ratio? C) lower the price of their products. 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. Economies of scale are the cost advantage a business achieves due to large-scale production and higher efficiency. B) perfectly inelastic demand. If this occurs, then the firm's demand curve will look ______. c) Blue jean designer Firms are profit-maximizers. B) raise the price of their products. Marilyn has been involved in negotiations between DTR and prospective lenders as DTR Following are the characteristics of oligopoly: Interdependence. For example, an industry with a five-firm concentration ratio of greater than 50% is considered an oligopoly. 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Answers: 1 Show answers Another question on Social Studies. 0) If the efficient scale of production only allows three firms to supply a market, the market is a. Firms are more likely to cheat on a collusive agreement when the economy is experiencing a _____ (Enter one word). C) Trick cheats, while Gear complies with the agreement. Oligopolists do not compete with each other. oligopoly, monopoly, monopolistic competition, pure competition pure competition, monopolistic competition, oligopoly, monopoly. 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. C) lower the price of their products. B) Dr. Smith does not advertise no matter what Dr. Jones does. a) Import competition 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. c) product development and advertising are relatively inexpensive 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. What kind of game is it when firms choose their optimal pricing strategy today without worrying about possible interactions in the future? What are the 4 characteristics of oligopoly? Firms in the industry make price and output decisions with an eye to the decisions and policies of other firms in the industry. The value denotesthe marginalrevenue gained. 8) Which of the following quotes shows a contestable market in the widget industry? *world trade Oligopoly refers to a market situation or a type of market organisational in which a few firms control the supply of a commodity. A) This game has no dominant strategies. 6) Which one of the following characteristics applies to oligopolistic markets? A Which of the following is not a characteristic of oligopoly? B) marginal cost curve is discontinuous. B) the firms may legally form a cartel. *Reduce uncertainty A 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. List the three steps followed under the gross profit method of estimating inventory. If productivity can be increased to $0.11 vans per labor hour, how many hours would the average laborer work that month? Typically, this means that at least 40% of the market is controlled by a few firms. A) Each firm has an incentive to collude. ENGL1190_V0854_2023WI_Communications23.docx. a) Cartel they will make more pricing low than if they both price high. b) Demand is highly elastic below the going price B)Firms set prices. They are characterized by the presence of a few large firms who produces Consequently, the sales of the other firm will be definitely reduced by the same percentage. It determines the law of demand i.e. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. d) Firms choose strategies at the same time. Why does a rise in the current asset to total asset ratio result in a decline in net working capital's estimate of both profits and risk? Marketers highlight the distinguishing features in the product commonly through packaging or a good design, which helps communicate the benefitting factors to the shoppers.read more. A)Each firm faces a downward -sloping demand curve. Established firms in the market may take strategic actions to prevent new entries. The payoff matrix of economic profits above displays the possible outcomes for Bob and Jane who are involved in game of whether or not to advertise. b) interindustry competition a) The number of average-sized firms in an industry needed to produce sales equivalent to the four largest firms (Enter one word per blank. E) a cartel. E) marginal revenue curve is upward sloping. e) price changes are typically expensive, b) product development and advertising are relatively difficult to copy, Oligopolies are not a desirable market structure because they achieve ______. *To increase control over the product's price b) There are barriers to entry into the market. c) Price war B) neither player would be willing to change his or her decision unless the other player also changes his or her decision. Marketers highlight the distinguishing features in the product commonly through packaging or a good design, which helps communicate the benefitting factors to the shoppers. Though, it is rare to find pure oligopoly situation, yet, cement, steel, aluminum and chemicals producing industries approach pure oligopoly. c) its rivals match a price increase but ignore a price cut *To increase economies of scale. b) it will lower the firm's costs A) Dr. Smith advertises no matter what Dr. Jones does. b) potential for mergers and acquisitions *interindustry competition *Preemptive pricing Such companies have complete control of the market, earning high profits and gains in a specific sector or service. c) Affect costs and influence the supply of rival firms a) are monopolies c) Dominant firms a) Affect profits and influence the profits of rival firms 9) Which isnota characteristic of oligopoly? Which of the following is NOT a characteristic of an oligopoly? Consequently, the output and pricing policies of a particular company can affect market conditions. An oligopoly (from Greek , oligos "few" and , polein "to sell") is a market form wherein a market or industry is dominated by a small group of large sellers (oligopolists). 300 laborers were employed at the plant that month. B) revenues, elasticity, profit, and payoffs. If Marilyn believes that the $10 million stock issue was undertaken only to improve DTRs the students used balls . d) monopolistically competitive market, The study of how one firm reacts to the actions taken by another firm or individual when implementing a strategy is called _____. Instead, they try different approaches, such as rewarding customers for their loyalty, differentiating their product offerings, providing sales promotion schemes, acting as sponsors, etc. c) The possibility of price wars increases, but profits are maximized. Barriers to entry. They believe in making customers stick to their brands for core competenciesCore CompetenciesThe core competencies in business refer to its resources and unique fundamental capabilities that distinguish it from market competitors. A study based on over 9,0009,0009,000 U. S. residents c) it will prevent a price war *The firm's demand curve will shift further to the left. 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. Course Hero is not sponsored or endorsed by any college or university. Production Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. As a result, each firm obligates to adhere to pre-determined price and quantity/output levels to maximize revenue. D) if Bob does not change his decision, Jane would like to change hers. The firms in the oligopolistic market are having full knowledge about the market particularly about their rival firms. c) kinked-demand If the products of the firms are differentiated the degree of interdependence is then weakened. Consequently, each firm must condition its behavior on the behavior of the other firms. 21) It is difficult to maintain a cartel for a long period of time. a) its rivals collude Which of the following is not a characteristic of oligopoly? D) unit elastic demand. a) By decreasing total suppliers C) in a repeated game but not a single-play game. *The game would eventually end in the Nash equilibrium (cell A). 1. a) Demand is highly elastic below the going price D) marginal revenue curve is discontinuous. 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? Firm A and Firm B are the only producers of soap powder. 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) assumes marginal cost is constant. . Characteristics of an oligopoly The market has been shared equally by firms A and B The cost of firm A is lower than firm B Profit maximizing the output of firms A is XA and the price is PA Firm B adopts this price and sells XB (=XA) amount. Answer: An oligopoly is an industry which is dominated by a few firms. Which of the following is characteristic of oligopoly, but not of monopolistic competition? c) dominant firms d) Firms choose strategies at the same time. b) Firms may sell a homogeneous product. Marilyn 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 (