Exam 14: Oligopoly

The price-leadership model does not assume the

Entry to and exit from a(n) ________ market are ________.

Cartels are more successful when members play by the rules and the industry faces an inelastic demand.

The government uses ________ figures contained in the Herfindahl-Hirschman Index (HHI) to help determine whether or not it will challenge a proposed merger.

A pure monopoly has a HHI value of

________ occurs when price- and quantity-fixing agreements among producers are implicit.

To the extent that oligopolies ________, there is the promise of new and exciting products.

Refer to the information provided in Table 14.4 below to answer the question that follows. Table 14.4 B's Strategy Raise Price Don't Raise Price Raise A's profit \ 6,000 A's profit \ 20,000 Price B's profit \ 6,000 B's profit \ 30,000 A's Strategy Don't A's profit \ 30,000 A's profit \ 10,000 Raise s profit \ 20,000 B's profit \ 10,000 -Refer to Table 14.4. If both firms follow a maximin strategy, the equilibrium in the game is

Refer to the information provided in Table 14.5 below to answer the question that follows. Table 14.5 B's Strategy Advertise Don't Advertise A's profit \ 200 A's profit \ 400 million million B's profit \ 200 B's profit \ 100 Advertise million million A's Strategy A's profit \ 100 A's profit \ 150 Don't million million B'sprofit \ 400 B's profit \ 150 Advertise million million -Refer to Table 14.5. What is the Nash equilibrium in the game?

________ is a group of firms colluding to make price and output decisions.

In the Cournot model, when a new firm begins production it assumes its demand curve is

The conclusion that firms in oligopoly always produce where price exceeds marginal cost is true for all models of oligopoly except the

Related to the Economics in Practice on page 306: Almost 90 percent of advertisements seen in movie theaters are produced and sold by two firms, National CineMedia and Screenvision. Assume that National CineMedia is responsible for 70 percent of the advertising, Screenvision is responsible for 20 percent of the advertising, and the other 10 percent is produced by one other firm. Based on these numbers, the HHI in this industry would be

An oligopoly with a dominant price leader will produce an output level that is ________ than the output level that would prevail if the industry were competitive and sells it at a price that is ________ than the price that would prevail if the industry were competitive.

The ________ Act extended the government's authority to ban vertical and conglomerate mergers.

An oligopolistic model in which firms produce exactly the same results as would exist if the industry was ________ is called the collusion model.

The four largest firms account for approximately 90% of U.S. beer sales. The U.S. beer industry would be best classified as a(n)

A maximin strategy will maximize the maximum payoff that can be earned.

Refer to the information provided in Table 14.1 below to answer the question that follows. Table 14.1 B's Strategy A's Strategy Raise Price Raise A's profit \ 3,000 Price B's profit \ 3,000 Don't A's profit \ 15,000 Raise s profit \ 10,000 Don't Raise Price A's profit \ 10,000 B's profit \ 15,000 A's profit \ 5,000 B's profit \ 5,000 -Refer to Table 14.1. The Nash equilibrium in the game is

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