Exam 18: Oligopoly

-The table above shows the payoff matrix offered to two suspected criminals,Bonnie and Clyde.The payoffs are the years they will spend in prison.The suspected criminals are not allowed to communicate.Which of the following statements correctly describes the equilibrium choices made by Bonnie and Clyde?

When a market has barriers to entry,

Two firms are competing in a duopoly and are trying to decide which price to set.The two prices under consideration are a high monopoly price and a low competitive level.If both seller A and seller B chose the monopoly price,each will make $20 million of economic profit.However,if one picks the monopoly price while the other picks the competitive price,the high-price firm will lose $1 million while the low-price firm will make $32 million.If both sell at the competitive level,they both make zero economic profit.Complete the payoff matrix below and determine the Nash equilibrium.

Which of the following is always illegal?

If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,

A characteristic common in both oligopoly and monopolistic competition is

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,the lowest price at which a firm could stay in business in the long run is ________ per unit and the quantity demanded in the market at that price is ________ units per hour.

Resale price maintenance is a form of

If a firm,Best Computer Buys,requires its customers to buy software from it whenever the customers purchase a computer,the company's policy is called

What is the legal status of a cartel among firms in the United States?

Which of the following is an example of exclusive dealing?

What is the best outcome for society: When firms in an oligopoly operate as a monopoly or when they act as perfect competitors? Briefly explain your answer.

-The figure above shows the market demand curve for a market with three firms.It also shows a firm's marginal cost curve.In this oligopoly,what is the range of output and prices? Why does this range of outcomes exist?

When a city licenses only 3 taxi firms to serve the market,the city has created a

In 1911,Standard Oil Co.was declared a monopoly by the government under the Sherman Act and the company was ordered to break itself up into competing companies.Two oil companies,Exxon and Mobil,were the result of this breakup.A few years ago,Exxon and Mobil merged again to form ExxonMobil Corporation.Why did the government allow this merger now?

-The figure above shows the market demand curve and the ATC curve for a firm.If all firms in the market have the same ATC curve,then ________ limit(s)the market to 3 firms.

If an oligopolistic game is repeatedly played,which of the following can occur?

In a cartel,how does the number of firms affect the likelihood that the cartel will be able to successfully maintain a high price?

-Intel and AMD are a duopoly that produces CPU chips.Intel and AMD can conduct R&D or they cannot conduct R&D.The table above shows the payoff matrix for the two firms.If AMD is playing a tit-for-tat strategy,then if Intel conducted R&D last period,AMD

Briefly explain resale price maintenance.Is it legal or illegal? Does it create efficiency or inefficiency?