Exam 14: Oligopoly and Strategic Behavior

If an oligopolist's competitors follow its price cuts but ignore its price increases, the oligopolist would end up holding its price constant even if its marginal cost changes.

A Nash equilibrium can only occur in repeated games.

Secret conspiracies to fix prices are examples of

Concentration ratios

Which of the following is not true of covert collusion?

Mutual interdependence means that

A two-player or firm game in which one firm's gain must equal the other firm's loss is called a

Potential entry by new firms and competition from imports tend to worsen the economic inefficiency in an oligopoly.

Mutual interdependence refers to the situation when entry by new firms into an industry will tend to shrink the profits of existing firms.

An empty threat is a statement of coercion that is not believed by the threatened firm.

The study of how people (or firms) behave in strategic situations is called

Which of the following best describes a Nash equilibrium?

Which of the following has not contributed to the development of oligopolies in the U.S. economy?

Which of the following factors tends to foster the development of an oligopoly?

Under oligopoly, if one firm in an industry significantly increases advertising expenditures in order to capture a greater market share, it is most likely that other firms in that industry will

If the four-firm concentration ratio in an oligopolistic five-firm industry is 80 percent, and each firm has an equal percentage of sales, the Herfindahl index is

The four-firm concentration ratio for an industry measures the

Suppose that total sales in an industry in a particular year are $600 million and sales by the top four sellers are $200 million, $150 million, $100 million, and $50 million, respectively. We can conclude that

The four-firm concentration ratio for the national industry does not capture the effects of all of the following, except

Game theory is best suited to analyze the pricing behavior of