Exam 13: Monopolistic Competition and Oligopoly

Firm Market share (percent) 1 20 2 20 3 15 4 10 5 10 6 8 7 7 8 5 9 5 -There are 9 firms in an industry with market shares in the table above. Calculate the HHI for the industry. What kind of market does this operate in and why.

Imagine a duopoly in which two firms, A and B, produce the monopoly profit-maximizing output and equally share the economic profit. If firm A increases its output, the market price ________ and total economic profit of the two firms combined ________.

In monopolistic competition, profit is maximized by producing so that marginal revenue

13.5 Chapter Figures The figure above illustrates a firm's demand and marginal revenue curves and its cost curves. -If the firm in the figure above attempted to minimize its average total cost by producing 100 pairs of Tommy jeans per day at an average total cost of $20 per pair and it sold those jeans for $80 per pair, the firm would ________.

In the above figure, the output of an oligopoly will range between

-Two firms are introducing an improved version of their toothpastes. They must decide whether or not to advertise their products. The table above gives the payoff matrix in terms of the economic profits they expect in each case. The payoffs are in terms of millions of dollars. a. What is the Nash equilibrium for the game? b. If they could cooperate, what strategy would they prefer? What would be the payoff?

Which of the following is found ONLY in oligopoly?

-In an oligopoly in which the firms have entered into a cartel agreement, the Nash equilibrium exhibits which of the following?

A cartel is a group of firms

A firm in monopolistic competition

Game theory is the tool that economists use to analyze strategic behavior, which is behavior that takes into account the ________ behavior of others and the mutual recognition of ________.

-The above figure shows a motel engaged in monopolistic competition with other motels. The equilibrium quantity at this motel is ________ rooms per day.

The prisoners' dilemma is an example of

In monopolistic competition, the products of different sellers are

Which of the following characterize a firm in monopolistic competition in the long run? i. operating at the minimum efficient scale ii. markups of price over marginal cost iii. zero economic profit

The major difference between monopolistic competition and monopoly is

A market with only two firms is called a

An oligopoly created because of economies of scale is called a

If there are four firms in an industry with market shares of 50 percent, 40 percent, 5 percent, and 5 percent, the Herfindahl-Hirschman Index is

When the Herfindahl-Hirschman Index for an industry is