A market is deemed oligopolistic or extremely concentrated when it is shared between a few common companies. 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. An oligopoly is a market structure that involves few producers and suppliers (www.oecd.org). 5) Which one of the following characteristics applies to oligopolistic markets? a- Compute the Cournot equilibrium total quantity, price, quantity for each firm, and . 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. E) entry into the industry of rival firms will raise cartel profit as long as the new firms join the cartel. 11) Which one of the following quotations best describes a dominant firm oligopoly? Firms in anoligopoly marketfocus on non-price competition and less innovation but ensure their brands are uniquely identifiable. Mutual interdependence among the firms in decision making is the essential feature of the oligopolistic market. they will make more pricing low than if they both price high. *To obtain lower input prices ratio. d) both productive efficiency and allocative efficiency, b) neither productive efficiency nor allocative efficiency. E) an oligopoly. 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. c) They move leftward and upward to a higher point on the average-total-cost curve. d) Its marginal revenue curve would consist of two segments, d) Its marginal revenue curve would consist of two segments ADVERTISEMENTS: This fact is recognized by all the firms in an oligopolistic industry. *Patents, Which are reasons that that firms merge? *The firm's demand curve will shift further to the left. It encourages existing brands to improve product quality and originality by instilling a sense of rivalry. Oligopolistic behavior implies that oligopolists prefer competition ______. 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. Following are the characteristics of oligopoly: Interdependence. B) each member will face the temptation to cheat on the cartel price to increase its sales and profit. Patent rights or accessibility to technology may exclude potential competitors. Consequently, the sales of the other firm will be definitely reduced by the same percentage. Strategic independence. c) Firms earn zero economic profits in the long-run. C) assumes that marginal revenue equals marginal cost only at the quantity at the "kink." a) price leadership What are the 4 characteristics of oligopoly? If one firm is large enough to account, which is that 80% of sales in the industry. c) through collusion B. C)The sales of one firm will not have a significant effect on other firms. Wal-Mart's marginal cost of a flat panel TV has fallen, and as a result Wal-Mart will ________. In the scenario above, the market is. d) The advertising model, To reduce uncertainty or increase profits, oligopolists may change their prices ______. Pure because the only source of market power is lack of competition. What kind of problem does this represent with the four-firm concentration ratio? c) its rivals match a price increase but ignore a price cut The total market demand is P(Q) = 50 - 2Q, where Q is the total quantity produced by all (active) firms in the industry. c) Dominant firms 2. a) Import competition Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. c) regulated monopoly A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating. 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. Given the emergence and expected evolution of AI-driven services in various niches, it is likely that there will be a highly concentrated market devoted explicitly to the AI needs of consumers. d) They do not achieve allocative efficiency because their price exceeds marginal cost. It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. A 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. a) Affect profits and influence the profits of rival firms b) Its demand curve is downward-sloping a. *Large capital investment a) fewer firms than monopolistic competition. B) the firms may legally form a cartel. *The firm's profits will be lower. Oligopolists do not stress competing with each other on the pricing front. d) cost leadership. 0. d) their profits and sales will rise. D) assumes that competitors will match price cuts and ignore price increases. 4. That means higher the price, lower the demand. d) price changes are often difficult to match D) Bud has a dominant strategy but Miller does not. 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). D) is not; to comply when the other firm complies and to cheat when the other firm cheats b) its rivals match a price cut but ignore a price increase a) are less efficient due to competition *The game would eventually end in the Nash equilibrium (cell B or C). Marginal revenue = Change in total revenue/Change in quantity sold. La renta de la tierra de primera calidad ser siempre superior a la renta de la tierra de segunda categora. 5.3.5 Apply Concepts of Oligopoly and Oligopoly Models .pdf. 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. What is oligopoly and its characteristics? C. La sociedad se encuentra dividida entre capitalistas, terratenientes y trabajadores. 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 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. *To obtain lower input prices 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. O B. Even though the products of companies A and B are similar, there must be something that distinguishes them. In first-degree price discrimination, a monopolist charge each customer the highest price the customer is willing to pay. *It helps reduce demand for material products. a) Import competition What happens to oligopolistic firms when a recession occurs? What would have been DTRs debt to equity ratio if the$10 million of stock had not been b) through pricing C) the HHI for the industry is small. 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) a perfectly competitive market. *Increase profits 1. c) dominant firms c) allocative efficiency but not productive efficiency You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. Oligopolists in an oligopolisticmarket structure agree not to raise their prices but match only price cuts to avoid price rigidity. B) raise the price of their products. *It lowers search costs of information for consumers. The concentration ratio measures the market share of the. In a(n) _____ game one firm moves first, committing to a strategy and then the rival firm responds. While it is true that strategic behavior and mutual interdependence characterize oligopolies, this is not the reason why they are price makers. Interdependence: The foremost characteristic of oligopoly is interdependence of the various firms in the decision making. It is an essential component of marketing strategy leading to brand recognition and business growth. The need to spend a huge amount of money on name recognition and market reputation may discourage entry by new firms. It helps avoid the potential price war and price rigidity. Question: Which of the following is NOT a characteristic of an oligopoly? 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 _____. d) By updating manufacturing equipment, What is the four-firm concentration ratio? C) lower the price of their products. A) a firm in an oligopoly market. Such companies have complete control of the market, earning high profits and gains in a specific sector or service. b) Interindustry competition A) in a single-play game or a repeated game. E) unknown. 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. . 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 . How oligopolists react to the price change by one firm can be best understood with the downward-sloping Kinked demand curve. A) 0. When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. c) is always downward sloping e) through cartels, c) through product development c) The supply curve model B) unit elastic. 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. The number of suppliers in a market defines the market structure. c) Nash equilibrium Meanwhile, all firms know that their decisions affect other firms sales and profit, hence they necessarily react against those decisions. a) inelastic 16) A monopolistically competitive firm is like an oligopolistic firm insofar as A) both face perfectly elastic demand. A) "I am producing extra widgets, even though it costs me short-run profits, to stop Wally's Widgets from expanding into my market." 1) A cartel is a group of firms which agree to A) behave competitively. A)Each firm faces a downward -sloping demand curve. An oligopolistic market exhibits the followingoligopoly features: It raises barriers for new entrants to enter into the respective sector. But the other firms act considering the interdependence. A) Each firm faces a downward-sloping demand curve. A) Each firm faces a downward-sloping demand curve. A Which of the following is not a characteristic of oligopoly? *interindustry competition a) They may produce homogeneous or differentiated products. a) Cartel Which of the following is not a characteristic of an oligopoly? The existence of oligopoly requires that a few firms are able to gain significant market power, preventing other, smaller competitors from entering the market. Their differences can range from. D) Bob denies and Art confesses. 7) The kinked demand curve theory of oligopoly predicts that B) there are two producers of two goods competing in an oligopoly market Sometimes there may be many firms but the large share of the industrys productive capacity is accounted for only by a few firms, the others share will be insignificant as far as the market is concerned. C) other firms will raise their prices by an identical amount. And that is what turns out to be the unique selling proposition (USP) of the respective brands in the oligopolistic industry. B) interdependence of firms. What are the 4 characteristics of oligopoly? d. 2. . Here, they focus on each other and try to exceed customer expectations in every possible way. a) It could be downward or upward sloping. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. c) Affect costs and influence the supply of rival firms e) undefined, In the graph, the price elasticity of demand is highly ______ above the price of P0. For an industry to be considered an oligopoly the four-firm concentration ratio must be ______. 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. Which statement is true about oligopolies? c. Competing firms can enter the industry easily. 18) A market with a single firm but no barriers to entry is known as It is one of the four market situations, including perfect competitionPerfect CompetitionPerfect competition is a market in which there are a large number of buyers and sellers, all of whom initiate the buying and selling mechanism. A) This game has no dominant strategies. C) the good produced in the market has been deemed a necessity The demand curve will look kinked to reflect the fact that rivals will match price *decreases* but ignore price *increases*. The value denotesthe marginalrevenue gained. D) neither is protected by high barriers to entry. Interdependence When the number of firms in an oligopolistic industry increases from 3 to 10, it is ______ to collude. 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). Each firm has a substantial share of the market supply. d) vertical Which of the following is NOT a characteristic of an oligopoly? The market share of the firms is unequal. a) The same as monopolistic competition On the other hand, if an oligopolist reduces output by raising prices, the rest refrain from doing so. Impure because have both lack of d) percentage of industries that are oligopolies, c) sales of the largest firms in an industry, Firms in oligopolistic industries are "price makers" because such firms ______. As a result, the implementation of the policy has been marginalizing the rural settled peasant . E) other firms will not raise theirs. A) equilibrium price and quantity will be sensitive to small cost changes. The distinguishing characteristics of oligopoly are briefly explained below: 1. e) It could be downward sloping or kinked. b) competitively It encompasses several industries, including banking and investment, consumer finance, mortgage, money markets, real estate, insurance, retail, etc. a) The possibility of price wars diminishes and profits are maximized. 14) The kinked demand curve model *To increase control over the product's price As in an oligopoly market, the decision of one firm influences the process and working of another firm. A single a) Demand is highly elastic below the going price After each player chooses his or her best strategy and sees the result, The more concentrated a market is, the more likely it is to be oligopolistic. . Share with Email, opens mail client We are dedicated to providing you with the very best in economics knowledge, with an emphasis on microeconomics and macroeconomics. 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) kinked and steep E) specify what happens if costs change. price changes, not production costs, so it can't be b. Prisoners' dilemma describes a case where 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. b) Localized markets A. b) Demand is highly elastic below the going price 2) In the dominant firm model of oligopoly, the larger firm acts like 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. d) The same as a monopoly, By controlling ______ through collusion, oligopolists may be able to reduce ______, ______ profits and block the entry of new rivals. E) none of the above is done. Keep its price constant and thus decrease its market share C. Increase its price and thus increase its market share D. Decrease its price and thus decrease its market share a) prices; uncertainty; increase 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 ______. 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, B) both prisoners deny. 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 ______.

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