Exam 18: Oligopoly

Suppose the industry for washing machines has only four firms.The market shares are: Firm A,40 percent; Firm B,20 percent; Firm C 20,percent; and Firm D,20 percent. a.What is the Herfindahl-Hirschman Index (HHI)? b.If Firms C and D were to announce a merger,would the Federal Trade Commission oppose the merger?

Game theory is used to analyze the interactions among firms in ________.

If one firm in a duopoly increases its production by one unit beyond the monopoly output,that firm's profit ________,the other firm's profit ________,and the total profit of the duopoly ________.

Even though four firms can profitably sell hotdogs downtown,the government licenses only two firms.This market is a

In an oligopoly,output is

Boeing and Airbus have entered into a cartel agreement that will enable them to boost their profits.What occurs if Boeing decides to cheat on the agreement? i.Boeing lowers the price of its airplanes. ii.The total industry output increases. iii.The total profits in the airplane industry will decrease.

Which of the following is found ONLY in oligopoly?

Firms in an oligopoly i.are independent of each others actions. ii.can each influence the market price. iii.charge a price equal to marginal revenue.

In a market with a Herfindahl-Hirschman Index of 2,000,according to their guidelines will the Department of Justice challenge a merger that would increase the index by 50?

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

When economies of scale limit the number of firms in an industry to 3,there is a

A cartel is

Firms operating in an oligopoly

Resale price maintenance is a form of

If Polka Cola agrees to sell its cola to a retailer only if the retailer also buys a lemon-lime drink,Polka Up,then Polka Cola is engaged in

The tool that economists use to analyze the mutual interdependence of oligopolies is

The efficient scale of one firm is 20 units and the average total cost at the efficient scale is $30.The quantity demanded in the market as a whole at $30 is 40 units.This market is

Which of the following is (are)prohibited if it substantially lessens competition or creates a monopoly? i.price discrimination ii.tying arrangements iii.exclusive dealing

For a duopoly,the highest price is charged when the duopoly achieves

The prisoners' dilemma is an example of