Exam 14: Oligopoly

Refer to the information provided in Table 14.2 below to answer the question that follows. Table 14.2 B's Strategy Advertise Don't Advertise A's profit \ 100 A's profit \ 200 million million B's profit \ 100 Advertise million B's profit \ 50 million A's Strategy A's profit \ 50 A's profit \ 75 Don't million million B'sprofit \ 200 B's profit \ 75 Advertise million million -Refer to Table 14.2. Firm A?s dominant strategy is

The share of industry output accounted for by the top firms in an industry is the industry's concentration ratio.

Related to the Economics in Practice on page 302: A television at a local electronics store has a marked retail price of $1,000. This television has been advertised at 40 percent off the retail price. The store is also having a promotion of an additional 50 percent off all sale-priced televisions. Based on these stackable discounts, what is the actual selling price of this television?

The United States is a member of the OPEC cartel.

You read that 40 firms that grow and export strawberries to the United States decide to form a cartel. The cartel aims to raise the price of strawberries and reduce output to increase profits for the strawberry growers. You predict that this cartel will probably

Schumpeter and Galbraith believed that concentrated industries had lower rates of technological advances than less concentrated industries.

A market is defined as contestable if entry to it

Firms are more likely to avoid a prisoners' dilemma when they interact repeatedly than when they rarely interact.

The economist Joseph Schumpeter argued that industrial concentration, in which a relatively ________ number of firms control the market place, actually ________ the rate of technological advance.

In the Cournot model, firms take their rivals' reactions as given.

One thing oligopolists must do in order to determine their optimal strategy is

The major distinguishing characteristic of oligopoly is that

The HHI is calculated by summing the square of the percentage shares of the firms in the market.

If the government stops enforcing its collusion laws and oligopolies are now able to collude, they will ________ the price charged and ________ the total output produced.

The Five Forces Model determines whether an industry is an oligopoly.

Refer to the information provided in Table 14.3 below to answer the question that follows. Table 14.3 B's Strategy Advertise Don't Advertise A's profit \ 200 A's profit \ 75 million million Advertise B's profit \ 75 million B's profit \ 50 million A's Strategy A's profit \ 50 A's profit \ 100 Don't million million B's profit \ 200 B'sprofit \ 100 Advertise million million -Refer to Table 14.3. If both firms follow a maximin strategy, the equilibrium in the game is

In ________ markets, large oligopolistic firms end up behaving like perfectly competitive firms.

Oligopolists compete on quality but not price.

Industries with an HHI of under 1,000 are considered unconcentrated, and any proposed merger would go unchallenged by the Justice Department.