Exam 12: Oligopoly: Firms in Less Competitive Markets

Apple and Toshiba are deciding whether to develop and sell a laptop-tablet hybrid to compete with the one developed by Intel.This best describes which of the five competitive forces?

List the competitive forces in the five competitive forces model.

Oligopolies are difficult to analyze because

Which of the following economists did not help to develop game theory analysis?

Marginal revenue for an oligopolist is

An oligopolist differs from a perfect competitor in that

Patents, tariffs and quotas are all examples of

Figure 12.3 Rainbow Writer (RW)is a small online company selling a highly rated software package for printing color labels directly onto CDs. The firm currently earns a profit of $2 million per year selling its package exclusively on its Web site. Odeon, the producer of the most popular software package for editing and burning CDs and DVDs has expressed interest in bundling Rainbow Writer's product into its own package. Odeon expects that bundling would further boost its sales and allow it to sell the new bundled product at a higher price, thus raising its profits beyond its current profit of $12 million. Figure 14.3 shows the decision tree for the Rainbow Writer-Odeon bargaining game. -Refer to Figure 12.3.What is the equilibrium outcome in this game and is this a subgame-perfect equilibrium?

If an industry is made up of five identical firms, the four-firm concentration ratio is

Monopolistic competition differs from oligopoly in that in monopolistic competition firms act independently while in oligopoly firms act interdependently.

Figure 12.2 The government of a developing country plans to award two firms, Gigacom and Xenophone, the exclusive rights to share the market for high speed internet service. Gigacom and Xenophone can both provide the service either via television cable lines or via direct subscriber line (DSL). Suppose the government is considering a proposal to delay one firm's entry into the market on the grounds that it wants to prevent "harmful" competition. Figure 12.2 shows the decision tree for this game. -Refer to Figure 12.2.If the government delays Gigacom's entry and Xenophone moves first, is a threat by Gigacom that it will provide DSL service if Gigacom provides cable service a credible threat?

The study of how people make decisions in situations where attaining their goals depends on their interactions with others is called

Table 12.3 Suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in Table 12.3 shows the profits earned per day by each country. "Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota. -Refer to Table 12.3.Is there a dominant strategy for Saudi Arabia and, if so, what is it?

Airlines often engage in last-minute price cutting to fill remaining empty seats on a flight because this practice will generally

The barrier to entry that allowed Alcoa to make persistent economic profits was ownership of an essential input.

An entry barrier exists when firms in an industry charge the lowest price possible for their products.

Which of the following is the best example of an oligopolistic industry?

Suppose two firms in a duopoly implicitly collude and charge a high price.How might each firm benefit from advertising that it will match the lowest price offered by its competitor?

The Potash Corporation of Saskatchewan (PotashCorp)was able to block competition through

Economies of scale can lead to an oligopolistic market structure because