Exam 14: Oligopoly

The 1890 law intended to prevent the establishment of more monopolies and to break up existing ones in the United States was the _____ Act.

An industry characterized by a few interdependent firms and by barriers to entry is called:

Use the following to answer question: Figure: Prisoners' Dilemma for Thelma and Louise -(Figure: Prisoners' Dilemma for Thelma and Louise)Use Figure: Prisoners' Dilemma for Thelma and Louise.Thelma and Louise are arrested and jailed for murder.Given the payoff matrix in the figure,the optimal behavior for Thelma and Louise to minimize their joint sentence is for Thelma _____ and for Louise ____.

Use the following to answer question: Figure: Monopoly Profits in Duopoly -(Figure: Monopoly Profits in Duopoly)Use Figure: Monopoly Profits in Duopoly.Given the duopoly industry illustrated in the figure,if each firm acted on the belief that it faced demand curve D₂ and acted without consideration of the other,each firm would attempt to maximize economic profits by producing quantity _____ and setting price equal to _____.

As a New York business owner who does a lot of flying,you are keenly aware of even small changes in airfare from New York to Chicago.You have flown this route long enough to know that each airline is essentially a perfect substitute for the others.You notice that every time the largest airline changes the price,smaller airlines follow,but the smaller airlines are always priced slightly below the fare of the largest airline.This industry could BEST be described as one with:

Price leadership is an attempt by a firm to convince buyers that its product is different from the products of other firms in the industry.

In the U.S.economy,oligopoly is rare.

A Nash equilibrium results when each player chooses the action that maximizes his or her payoff given the actions of other players.

Use the following to answer question: Figure: Payoff Matrix for Gehrig and Gabriel -(Figure: Payoff Matrix for Gehrig and Gabriel)Use Figure: Payoff Matrix for Gehrig and Gabriel.The figure describes two people who sell handmade Davy Crockett figurines in San Antonio.Both Gehrig and Gabriel have two strategies available to them: to produce 5,000 figurines each month or to produce 7,000 figurines each month.For both Gehrig and Gabriel,the dominant strategy is to:

If Delta offers free drinks and snacks on its flights and Southwest follows,they are engaging in tacit collusion.

As the number of firms in an oligopoly decreases:

Oligopoly is a market structure characterized by:

If the Herfindahl-Hirschman index (HHI)for an industry is 300,the industry is considered:

If Coke is able to use product differentiation successfully,some customers may be willing to pay more for a Coke than for another very similar soda.

Use the following to answer question: Figure: Prisoners' Dilemma for Thelma and Louise -(Figure: Prisoners' Dilemma for Thelma and Louise)Use Figure: Prisoners' Dilemma for Thelma and Louise.Thelma and Louise are arrested and jailed for murder.Given the payoff matrix in the figure,the Nash equilibrium behavior is for Thelma _____ and Louise _____.

Across most industries,oligopoly is far more common than is either perfect competition or monopoly.

A duopoly is an industry that consists of:

An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry is an example of cooperative behavior.

The outcome of a strategic choice is called a:

The breakup of Standard Oil in 1911 was one of the first applications of antitrust policy in the United States.