Exam 11: Oligopoly

Duopolists A and B face the following demand curves: Q_A = 100 - 2P_A + 5P_B and Q_B = 120 - 3P_B + 4P_A.If both firms have zero marginal cost,what are the profit-maximizing prices and quantities?

Duopolists A and B face the following demand curves: Q_A = 120 - 2P_A + P_B and Q_B = 120 - 2P_B + P_A.If both firms have zero marginal cost and they form a cartel,what is the profit-maximizing price and quantity?

With the price leadership strategy:

If duopolists engage in price competition,the result is:

Two firms (A and B)have marginal costs MC_A and MC_B,marginal revenues MR_A and MR_B,and market marginal revenue MR.If both firms produce as a cartel,they should produce so that:

Suppose duopolists in the market for spring water share a market demand curve given by P = 50 - 0.02Q,where P is the price per gallon and Q is thousands of gallons of water per day.The marginal cost of producing water is near zero for both firms.Optimal output for Cournot duopolists moving simultaneously is:

Profit-maximizing cartels allocate sales according to:

Two local ready-mix cement manufacturers,Here and There,have combined demand given by Q = 105 - P.Their total costs are given by TC_Here = 5Q_Here + 0.5Q²_Here and TC_There = 5Q_There + 0.5Q²_There.If they successfully collude,their total output will be:

Duopolists A and B face the following demand curves: Q_A = 150 - 5P_A + 4P_B and Q_B = 150 - 5P_B + 4P_A.If both firms have zero marginal cost and they form a cartel,what is the profit-maximizing price and quantity?

Oligopoly is a market structure that necessarily has:

Duopolists who compete on the basis of price will:

An oligopolist that faces a kinked demand curve is charging price P = 6.Demand for an increase in price is Q = 280 - 40P and demand for a decrease in price is Q = 100 - 10P.Over what range of marginal cost would the optimal price remain unchanged?

Glyde Air Fresheners is the dominant firm in the solid room aromatizer industry,which has a total market demand given by Q = 80 - 2P.Glyde has competition from a fringe of four small firms that produce where their individual marginal costs equal the market price.The fringe firms each have total costs given by TC_i = 10Q_i + 2Q²_i.If Glyde's total costs are given by TC_G = 100 + 6Q_G,what price should Glyde establish for air fresheners?

If the cartel described by the accompanying diagram is broken up and forced into a perfectly competitive market situation,the optimal output and price will be:

The OPEC oil cartel lost its market power and world oil prices fell in the 1980s because:

Two local ready-mix cement manufacturers,Here and There,have combined demand given by Q = 105 - P.Their total costs are given by TC_Here = 5Q_Here + 0.5Q²_Here and TC_There = 5Q_There + 0.5Q²_There.If they cannot successfully collude and instead produce where the market price equals marginal cost,their total output will be:

Profit-maximizing cartels choose price equal to:

When an economist says an oligopoly has a "small" number of firms,the economist means:

In the model of oligopoly,there:

A market where there are only a few sellers is known as: