Exam 11: Monopolistic Competition and Oligopoly

Table 11-4 Quantity Total Marginal Total Marginal Sold Price Revenue Revenue Cost Cost Profit 0 \ 10 \ 0 \ldots \ 2 \ldots -\ 2 1 9 9 8 2 8 16 13 3 7 21 17 4 6 24 20 5 5 25 22 6 4 24 26 Table 11-4 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company.Victoria sells plastic vials to university and private research laboratories. -Refer to Table 11-4.Victoria's profit-maximizing output is where

Figure 11-13 -Refer to Figure 11-13.What is the area that represents the firm's profit?

Because many business situations are repeated games,firms may be able to avoid the prisoner's dilemma and implicitly collude to keep prices high.

All games share three characteristics.Two of these characteristics are rule and strategies.What is the third characteristic called?

Table 11-8 Saudi Arabia's (S) Choices Nigeria's (N) Choices Low Output High Output Low Output S: \ 100 million profit N: \ 20 million profit S: \ 75 million profit N: \ 12 million profit High Output S: \ 80 million profit N: \ 30 million profit S: \ 60 million profit N: \ 20 million profit 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 11-8 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 11-8.Which of the following statements is true?

Economists have long debated whether there is a significant loss of well-being to society in markets that are monopolistically competitive rather than perfectly competitive.Which of the following offers the best reason why some economists believe that monopolistically competitive markets are less efficient than perfectly competitive markets?

If some monopolistically competitive firms exit their market after suffering short-run losses,the demand curves of remaining firms will shift to the right.

A four-firm concentration ratio measures

Which of the following is true for a monopolistically competitive firm in long-run equilibrium?

Table 11-5 Quantity Price Total Cost 1 \ 18 \ 14 2 16 20 3 14 26 4 12 32 5 10 38 6 8 44 Table 11-5 shows the demand and cost data facing a monopolistically competitive producer of canvas bags. -Refer to Table 11-5.What are the firm's profit-maximizing or loss-minimizing price and quantity?

Which of the following will not happen as a consequence of a monopolistically competitive firm suffering economic losses in the short run?

Which of the following characterizes the market that Starbucks competes in?

What is the trade-off that consumers face when buying the product of a monopolistically competitive firm?

A monopolistically competitive industry that earns economic profits in the short run will

In economics,the study of the decisions of firms in industries where the profits of each firm depend on its interactions with other firms is called

An oligopolist's demand curve is

You have just opened a new Italian restaurant in your hometown where there are three other Italian restaurants.Your restaurant is doing a brisk business and you attribute your success to your distinctive northern Italian cuisine using locally grown organic produce.What is likely to happen to your business in the long run?

Because of the flaws of the concentration ratio as a measure of the extent of competition in an industry,some economists prefer another measure of competition,the Herfindahl-Hirschman Index.

Which of the following explains why two firms,Apex and Bongo,would engage in implicit collusion,rather than explicit collusion?

Oligopolies exist and do not attract new rivals because