Exam 11: Oligopoly: Markets With Few Competitors

Which of the following is not an example of a government-imposed entry barrier?

Which of the following statements about the prisoner's dilemma is false?

Table 11.2 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 11.2 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 11.2.Is there a dominant strategy for Nigeria and, if so, what is it?

Table 11.1 Godrickporter and Star Connections are the only two airport shuttle and limousine rental service companies in the mid-sized town of Godrick Hollow.Each firm must decide on whether to increase its advertising spending to compete for customers.Table 11.1 shows the payoff matrix for this advertising game. -Refer to Table 11.1.Is there a dominant strategy for Star Connections and, if so, what is it?

In the kinked demand curve model of oligopoly, under what circumstances would an increase in marginal costs lead to an increase in the price? __________________________________________________________________________________________________________________________________________________________________________________________

The five competitive forces model was developed by

Table 11.3 Firm A(Alistair's)and Firm B (Baine's)are the only firms selling luggage in the upscale town of Adelaide.Each firm must decide on whether to increase its advertising spending to compete for customers.If one firm increases its advertising budget but the other does not, then the firm with the higher advertising budget will increase its profit.Table 11.3 shows the payoff matrix for this advertising game. -Refer to Table 11.3.The Nash equilibrium in this game is

The second-price auction is

A supplier of paper napkins to the fast food industry is unlikely to have significant bargaining power.

What is meant by the term 'government-imposed barrier to entry'? Why would a government be willing to impose barriers to entering an industry? __________________________________________________________________________________________________________________________________________________________________________________________

Sequential games are often used to analyse which two types of business strategies?

As word processing on personal computers expanded, sales of typewriters began to disappear.Which of Porter's competitive forces does this event demonstrate?

Natural resource cartels such as OPEC are inherently unstable because their members operate with excess capacity and have an incentive to cheat on their output quotas.

Figure 11.2 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 11.2 shows the decision tree for this game. -Refer to Figure 11.2.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?

A subgame is a simultaneous game embedded in a sequential game.

All of the following are ways by which existing firms can deter the entry of new firms into an industry except

Table 11.3 Firm A(Alistair's)and Firm B (Baine's)are the only firms selling luggage in the upscale town of Adelaide.Each firm must decide on whether to increase its advertising spending to compete for customers.If one firm increases its advertising budget but the other does not, then the firm with the higher advertising budget will increase its profit.Table 11.3 shows the payoff matrix for this advertising game. -Refer to Table 11.3.Does Baine have a dominant strategy and, if so, what is it?

The profit-maximising level of output and the profit-maximising price for an oligopolist cannot be calculated when we don't know

Which of the following is not among Porter's competitive forces?

The justification for occupational licensing laws is that they protect the public from incompetent practitioners (for example, lawyers and medical doctors), but the laws also result in