document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 2023 . E) Bud and Miller each have a dominant strategy. Which of the following is not a characteristic of an oligopoly? 1. a) Cartel a) purely competitive market C) firms in monopolistic competition. And rest of the businesses or minor players follow the same. An oligopoly is an industry dominated by a few large firms (Few sellers supplying, many buyers). B) other firms will lower theirs. 12) Because an oligopoly has a small number of firms 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. . a) kinked and steep issued for the land? price changes, not production costs, so it can't be b. They are Marilyn has been involved in negotiations between DTR and prospective lenders as DTR In a(n) _____ game one firm moves first, committing to a strategy and then the rival firm responds. 5) A market with a dominant firm and with weak barriers to entry ________ in long-run equilibrium because ________. A) potential entrants entering and making monopoly profit. b) are few in number 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? This is different compared to the perfectly competitive market and the monopolistic market that consist of a large number of sellers whereas there is only one sole seller in the monopoly market. b) product development and advertising are relatively difficult to copy B. El valor de cambio del bien se mide segn el trabajo que este tiene incorporado. In an oligopoly, dominant market players are influential enough to decide on the price of products and services. a- Compute the Cournot equilibrium total quantity, price, quantity for each firm, and . Characteristics: There are few firms in the market serving many consumers. Based on her experience with past negotiations, Marilyn knows that lenders are concerned about DTRs debt to equity All firms stick to what has been decided, thereby ensuring price stability in the sector. Each firm is so large that its actions affect market conditions. D) "I have been spending extra on research and development of my new two-way widget." C) the good produced in the market has been deemed a necessity *localized markets, Barriers to entry into an oligopoly most resemble those of a ______. 18) A market with a single firm but no barriers to entry is known as Why is collusion desirable to oligopolistic firms? A) Strategic Independence What is oligopoly and its characteristics? d) straight and steep b) greater than or equal to 50% Question: Which of the following is NOT a characteristic of an oligopoly? ratio. c) Firms earn zero economic profits in the long-run. 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. Due to minimal competition, each of them influences the rest through their actions and decisions. Non-Collusive Oligopoly-Sweezy's Kinked Demand Curve Model (Price-Rigidity) Usually, in Oligopolistic markets, there are many price rigidities. Some of its fundamental characteristics include the existence of a small number of firms, differentiated or homogeneous products, and barriers to entry. A) price. d) cheat, Which of the following represent shortcomings of the four-firm concentration ratio? Perfect competition is a market in which there are a large number of buyers and sellers, all of whom initiate the buying and selling mechanism. In the credit card industry, for example, Visa and MasterCard have a duopoly. 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 It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. When the government grants patents to, for example, three different pharmaceutical companies that each has its own drug for reducing high blood pressure, those three firms may become an oligopoly. A. cutting prices 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) It could be downward sloping or kinked. c) product development and advertising are relatively inexpensive The total market demand is P(Q) = 50 - 2Q, where Q is the total quantity produced by all (active) firms in the industry. Demand and cost differences, the number of firms in the industry, and the potential for cheating all represent _____ (one word) to collusion. 6) Which one of the following characteristics applies to oligopolistic markets? a) payoff d) Dominant firms, What are oligopolists able to do by controlling price through collusion? It encompasses several industries, including banking and investment, consumer finance, mortgage, money markets, real estate, insurance, retail, etc. *To increase economies of scale. An oligopoly in economics refers to a market structure comprising multiple big companies that dominate a particular sector through restrictive trade practices, such as collusion and market sharing. Then the large firm may consider the other two firms are too small, hence ignore their reactions while taking decisions. Experts are tested by Chegg as specialists in their subject area. Oligopoly is an important form of imperfect competition. d) elastic, An oligopoly firm's demand curve will be kinked if ______. D) is not; to comply when the other firm complies and to cheat when the other firm cheats b) interindustry competition 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. As a result, the implementation of the policy has been marginalizing the rural settled peasant . c) The percentage of total industry sales accounted for by the four largest firms In December, General Motors produced 6,600 customized vans at its plant in Detroit. as the price increases, demand decreases keeping all other things equal.read more shifts. In this market, there are a few firms which sell homogeneous or differentiated products. Oligopoly is said to prevail when there are few firms or sellers in the market producing or selling a product. A) "I am producing extra widgets, even though it costs me short-run profits, to stop Wally's Widgets from expanding into my market." Social Studies, 22.06.2019 00:00. An oligopoly is a market structure where a few large firms collude and dominate a particular market segment. A) suggests that price will remain constant even with fluctuations in demand. a) collusion; cartel E) Dr. Smith does not advertise if Dr. Jones advertises. b) There are barriers to entry into the market. Each firm faces a downward-sloping demand curve. A) all members of the cartel have a strong incentive to abide by the agreed-upon price. A)Each firm faces a downward -sloping demand curve. Based on the figure, if one firm cheats on the collusive agreement it can increase its payoff by c) allocative efficiency but not productive efficiency If productivity can be increased to $0.11 vans per labor hour, how many hours would the average laborer work that month? Instead, they collaborate on various fronts, such as economies of scaleEconomies Of ScaleEconomies of scale are the cost advantage a business achieves due to large-scale production and higher efficiency. B) collusion True or false: Firms in an oligopoly always produce a homogeneous product. Product differentiation refers to making a product look attractive and different from other products in the same class. OA. d) through advertising a) There are a few large firms that make up the industry. C. Some market power. B) "Every time Sparrow's Donuts has a donut sale, so does Tim Horton's." *Ownership and control of raw materials B) assumes marginal cost is constant. Answers: 1 Show answers Another question on Social Studies. Determinateness of demand curve is a part of law of demand and does not fall in oligopoly. While AI integration in the medical, legal, and financial sectorsFinancial SectorsThe financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. E) rivalry of the participants leads to the worst solution from their point of view. This represents what kind of problem with the four-firm concentration ratio? attempts to raise $425 million to use to build apartments in a growing area of Tulsa. *increasing sales and output d) Firms choose strategies at the same time. The firms produce differentiated products. Business Economics Consider a Cournot oligopoly with n = 2 firms. Increasing returns to scale is a term that describes an industry in which the rate of increase in output is higher than the rate of increase in inputs. 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) 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. Interdependence: The foremost characteristic of oligopoly is interdependence of the various firms in the decision making. 6. Firm B adopts this price and sells XB(
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