Exam 11: Oligopoly : Firms in Less Competitve Markets

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

Decision trees can only be used to analyse sequential games.

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

A patent is an example of

A set of actions that a firm takes to achieve a goal, such as maximising profits, is called

In an oligopoly, firms can increase their market power by

The barrier to entry that allowed Alcoa to make persistent economic profits was ownership of an essential input.

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

A cooperative equilibrium results when firms

In game theory, the three key characteristics of a game are

-Refer to Figure 11-3 Use the decision tree to determine whether Microsoft should deter Toshiba from entering the market for electronic book readers (e-readers). Assume that each firm must earn a 20% return on investment to break even. Explain Microsoft's decision process.

Which of the following is not part of an oligopolist's business strategy?

In most business situations where firms compete, often they can escape the prisoner's dilemma and reach the most profitable outcome. Which of the following is a reason for this?

A game in which each player adopts its dominant strategy

Decision trees are commonly used to illustrate how firms make business decisions that depend on the actions of rival firms. A decision tree has boxes that contain points that represent when firms must make the decisions contained in the boxes. What are these points called?

A large majority of the personal computers (PCs) in Australia use an operating system purchased from Microsoft. Microsoft's relationship with PC manufacturers is an example of which of Porter's competitive forces?

There is much evidence to suggest that airlines are more likely to match price cuts than price increases. Which of the following best explains this evidence?

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

A member of a cartel like OPEC has an incentive to

Oligopolies exist and do not attract new rivals because