Exam 11: Monopolistic Competition and Oligopoly

Table 11-13 Two rival oligopolists in the coffee industry, Wide Awake and Zuma, have to decide on their pricing strategy. Each can choose either a high price or a low price. Table 11-13 shows the payoff matrix with the profits that each firm can expect to earn depending on the pricing strategy it adopts. -Refer to Table 11-13.If the firms act out of individual self-interest,which prices will they select?

Which of the following is not a barrier to entry?

In contrast with perfect competition,excess capacity characterizes monopolistic competition.Excess capacity is due to which of the following?

When a monopolistically competitive firm cuts its price to increase its sales,it experiences a gain in revenue due to the

Figure 11-3 -Refer to Figure 11-3.The marginal revenue from one additional unit sold is the sum of the gain in revenue from selling the additional unit and the loss in revenue from having to charge a lower price to sell the additional unit.Based on the diagram in the figure

A dominant strategy is

Figure 11-8 Figure 11-8 shows cost and demand curves for a monopolistically competitive producer of iced tea. -Refer to Figure 11-8.What is the firm's profit-maximizing price?

Table 11-11 There are two custom carport manufacturers in Louisiana, Under Cover (U) and Made for Shade (M). Under Cover has been in the market for a long time and must now compete with newcomer, Made for Shade. Suppose that Under Cover believes that Made for Shade will match any price it sets. Use Table 11-11 to answer the following question and assume throughout that Under Cover believes that Made for Shade will match any price it sets. -Refer to Table 11-11.What price will Under Cover charge and what profit does Under Cover expect to make?

What is an oligopoly? Give two examples of oligopolistic industries in the United States.

OPEC periodically meets to agree to restrict the cartel's oil output,and yet almost every member of OPEC produces more than its own output quota.This suggests that OPEC has

Which of the following describes a difference between the marginal revenue and demand curves of a perfectly competitive firm and a monopolistically competitive firm?

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

All of the following are examples of oligopolistic markets except

Explain the difference between a cooperative equilibrium and a noncooperative equilibrium in game theory.

If the marginal revenue is negative then the revenue lost from receiving a lower price on all the units that could have been sold at the original price is smaller than the additional revenue from selling one more unit of the good.

Figure 11-17 -Refer to Figure 11-17.In the long run,why will the firm produce Qf units and not Qg units,which has a lower its average cost of production?

A game in which pursuing dominant strategies results in noncooperation that leaves all parties worse off is a

Does the fact that monopolistically competitive firms do not achieve productive efficiency or allocative efficiency mean that there is a significant loss in consumer welfare?

Is a monopolistically competitive firm productively efficient?

A four-firm concentration ratio measures