Exam 11: Monopolistic Competition and Oligopoly

Which of the following best explains why airlines often cut their ticket prices at the last-minute in order to fill the remaining empty seats on their flights?

Economists use game theory to analyze oligopolies because

Firms in an oligopoly are said to be interdependent.What does this mean?

Figure 11-11 -Refer to Figure 11-11.What is the monopolistic competitor's profit maximizing price?

Of the following industries,which has the highest four-firm concentration ratio?

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

Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?

Table 11-12 The payoff matrix shown above assumes that Perfect Plants and Floribunda Florist must decide whether to offer same-day delivery for their products. The matrix shows how much profit each firm will earn if it does or does not offer same-day delivery. The amount of profit for one firm depends on whether the other firm offers same-day delivery. -Refer to Table 11-12.Which of the following statements is true?

A game in which each player adopts its dominant strategy

Interdependence of firms is most common in

Table 11-8 Suppose OPEC has only two producers, Saudi Arabia and Ecuador. Saudi Arabia has far more oil reserves and is the lower-cost producer compared to Ecuador. 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?

In an oligopoly,firms can increase their market power by

A cooperative equilibrium results when firms

Table 11-2 Quantity (cases) Price (dollars) Total Revenue (dollars) Total Cost (dollars) 1 \ 75 \ 75 \ 60 2 70 140 85 3 65 195 105 4 60 240 115 5 55 275 130 6 50 300 155 7 45 315 190 8 40 320 230 9 35 315 280 Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 11-2 shows the firm's demand and cost schedules. -Refer to Table 11-2.What is likely to happen to the product's price in the long run?

Since 1972,the world price of oil has been largely determined by OPEC,which controls about 75 percent of the world's proven oil reserves.Since 1972 the price of oil has

Table 11-4 Quantity Sold Price Total Revenue Marginal Revenue Total Cost Marginal Cost Profit 0 \ 10 \ 0 \@cdots \ 2 \ldots -\ 2 1 9 9 82 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 universities and private research laboratories. -Refer to Table 11-4.Victoria's profit-maximizing quantity (Q)and price (P)are

According to the textbook,the most important barrier to entry is economies of scale.

When a monopolistically competitive firm lowers its price,one good thing happens to the firm.What is this "one good thing" called?

Tony's Italian Ice is a monopolistically competitive firm.If Tony's earns a profit in the short run,which of the following is most likely to occur?

Collusion