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Generally speaking, oligopolistic industries producing raw materials and semifinished goods usually offer differentiated products, while oligopolists producing consumer goods usually offer standardized products.

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Mutual interdependence means that oligopolistic producers rely primarily on price competition in determining their shares of the total market for their product.

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When oligopolists collude, they collectively tend to achieve similar results as a monopolist.

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Suppose the Herfindahl indexes for industries A, B, and C are 2,200, 2,000, and 1,600, respectively. These data imply


A) that market power is greatest in industry C.
B) that market power is greatest in industry B.
C) that market power is greatest in industry A.
D) nothing about the degree of concentration across the three industries.

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What two generalizations can be made about the pricing behavior of oligopolists?

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Two interrelated characteristics of olig...

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Refer to the game theory matrix, where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. Without collusion, the outcome of the game A) maximizes joint profits for the firms. B) results in a prisoner's dilemma. C) results in greater economic efficiency. D) forces one or more firms out of the industry. Refer to the game theory matrix, where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. Without collusion, the outcome of the game


A) maximizes joint profits for the firms.
B) results in a prisoner's dilemma.
C) results in greater economic efficiency.
D) forces one or more firms out of the industry.

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Suppose the only three existing manufacturers of video game players signed a written contract by which each agreed to charge the same price for products and to distribute their products only in the geographical area assigned them in the contract. This best describes


A) cost-plus pricing.
B) multiproduct pricing.
C) a cartel.
D) price leadership.

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Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. If both firms collude to maximize joint profits, the total profits for the two firms will be A) $1,200,000. B) $1,250,000. C) $1,400,000. D) $1,500,000. Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in thousands of dollars for a high-price or a low-price strategy. If both firms collude to maximize joint profits, the total profits for the two firms will be


A) $1,200,000.
B) $1,250,000.
C) $1,400,000.
D) $1,500,000.

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If oligopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry will be most accurately predicted by which of the following models?


A) the kinked demand curve model of oligopoly
B) the price-leadership model of oligopoly
C) the pure monopoly model
D) the monopolistic competition model

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Cartels are difficult to maintain in the long run because


A) they are illegal in all industrialized countries.
B) individual members may find it profitable to cheat on agreements.
C) it is more profitable for the industry to charge a lower price and produce more output.
D) entry barriers are insignificant in oligopolistic industries.

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Refer to the payoff matrix. Suppose that Speedy Bike and Power Bike are the only two bicycle manufacturing firms serving the market. Both can choose large or small advertising budgets. If this is a repeated game with no cooperation or reciprocity, cell A A) is not the expected outcome of this game. B) is the expected outcome of this game, and it is both a Nash equilibrium and a prisoner's dilemma. C) is the expected outcome of this game, but it is neither a Nash equilibrium nor a prisoner's dilemma. D) is the expected outcome of this game, and it is a Nash equilibrium but not a prisoner's dilemma. Refer to the payoff matrix. Suppose that Speedy Bike and Power Bike are the only two bicycle manufacturing firms serving the market. Both can choose large or small advertising budgets. If this is a repeated game with no cooperation or reciprocity, cell A


A) is not the expected outcome of this game.
B) is the expected outcome of this game, and it is both a Nash equilibrium and a prisoner's dilemma.
C) is the expected outcome of this game, but it is neither a Nash equilibrium nor a prisoner's dilemma.
D) is the expected outcome of this game, and it is a Nash equilibrium but not a prisoner's dilemma.

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A two-player game in which one player's gain is not completely offset by the other player's loss is called a


A) positive-sum game.
B) zero-sum game.
C) negative-sum game.
D) one-time game.

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If a product such as cement or bricks is costly to ship and, therefore, markets are very localized, the national concentration ratio for that industry


A) will be greater than 50 percent.
B) may understate the degree of monopoly.
C) may overstate the degree of monopoly.
D) will yield an accurate impression of the degree of monopoly.

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Advertising may be an efficiency-enhancing activity when it results in the following, except when it


A) enhances competition among sellers.
B) facilitates the introduction of new products.
C) increases sales thereby allowing firms to obtain economies of scale.
D) makes buyers more brand-attached, making their demand less elastic.

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Which constitutes an obstacle to collusion among oligopolists?


A) a standardized product
B) a large number of firms
C) prosperous economic conditions
D) trademarks and copyrights

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The Herfindahl index for the industry described in this table is A) 90. B) 2,750. C) greater than it would be if there were only four firms in the industry. D) 2,700. The Herfindahl index for the industry described in this table is


A) 90.
B) 2,750.
C) greater than it would be if there were only four firms in the industry.
D) 2,700.

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A major characteristic of oligopolistic firms is that


A) they are price takers.
B) interdependence exists between it and the other firms in the industry.
C) they alway produce a differentiated product.
D) they have a horizontal demand curve.

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Oligopolistic industries are characterized by


A) a few dominant firms and substantial entry barriers.
B) a few dominant firms and no barriers to entry.
C) a large number of firms and low entry barriers.
D) a few dominant firms and low entry barriers.

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Refer to the game theory matrix, where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. With collusion and no cheating, the outcome of the game is cell A) A. B) B. C) C. D) D. Refer to the game theory matrix, where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. With collusion and no cheating, the outcome of the game is cell


A) A.
B) B.
C) C.
D) D.

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The copper, aluminum, cement, and industrial alcohol industries are examples of


A) interproduct competition.
B) homogeneous oligopoly.
C) monopolistic competition.
D) differentiated oligopoly.

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Showing 121 - 140 of 362

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