Exam 25: Monopolistic Competition, Oligopoly, and Game Theory

The excess capacity theorem states that in equilibrium a monopolistic competitor will produce an output level larger than the one that would minimize its unit costs.

Exhibit 25-9 -Refer to Exhibit 25-9.There ___________ barriers to entry in a perfectly competitive market. There ____________ barriers to entry in monopolistic competition. There ____________ barriers to entry in oligopoly.There ____________ barriers to entry in monopoly. [Your answers should fill in blanks (H),(I),(J)and (K),respectively.]

Suppose that all countries in the world agree that it is important to undertake policies to reduce global warming and its associated negative economic effects. If the countries agree to undertake these policies,the prisoner's dilemma setting that this situation places the countries in would lead one to conclude that

The key behavioral assumption of the cartel theory is that oligopolists in an industry

In an oligopoly market,unlike in other market structures,firms

Exhibit 25-7 -Refer to Exhibit 25-7.Total fixed costs are equal to

A cartel is an organization of firms

Monopolistic competitive firms and perfectly competitive firms are similar in that both

The monopolistic competitor has a __________ elastic demand curve than the monopolist,largely because it faces __________ substitutes for the product it produces and sells.

Exhibit 25-8 -Refer to Exhibit 25-8.Average total cost at the profit-maximizing level of output equals

Exhibit 25-8 -Refer to Exhibit 25-8.Assuming that total fixed costs are $30,the average variable cost of producing 2 units of output is

The prisoner's dilemma can be used to help analyze such diverse topics as the arms race and the need for speed limit laws.

Cartels are easy to form and to maintain.

Exhibit 25-10 Suppose that the letter grade earned on a test for each student in a class depends upon how well he/she does relative to other students in the class. This exhibit shows a prisoner's dilemma setting for two representative students in the class, George and Gina. -Refer to Exhibit 25-10. If Gina studies for two hours and George studies for four hours,George's letter grade on the test will be a ___________ and Gina's letter grade on the test will be a __________________.

Which if the following is an example of an oligopoly market in which the firms produce a homogeneous product?

If a perfectly competitive firm and a monopolistic competitive firm face the same demand and cost curves,then

One of the ways in which some monopolistic competitors try to become more like monopolists is through the use of designer labels.

Which of the following statements is true?

Which of the following is not an assumption of oligopoly?

The demand curve facing a monopolistic competitive firm will be __________ than the demand curve facing a perfectly competitive firm,because the price elasticity of demand for the monopolistic competitive firm's product is __________ than that for the perfectly competitive firm.