Exam 13: Monopolistic Competition and Oligopoly

Use the following figure to answer the question : Figure 13-1 : shows the Stackelberg model of a duopoly.Both firms face constant marginal costs equal to OJ and the market demand curve is AD.The Stackelberg firm produces an output of OF and OF is equal to FL. -Refer to Figure 13-1.The output of the follower firm is represented by the distance _____.

In the Cournot duopoly model,the reaction curve shows:

In the Stackelberg model of oligopoly,the leader firm:

Which of the following conditions holds for a monopolistically competitive firm that is in equilibrium in the long run?

Use the following figure to answer the question : Figure 13-2 : shows the market demand curve [DD'],the supply curve of the fringe firms [S_F],the cartel's marginal cost curve [MC₀],and the cartel's marginal revenue curve [MR₀].Assume that the cartel behaves like a dominant firm. -Refer to Figure 13-2.Which of the following statements is true?

Consider a dominant firm model in which the elasticity of market demand is 1,the dominant firm's market share is 0.5,and the elasticity of supply of the competitive fringe firms is 4.What would be the dominant firm's elasticity of demand?

The Stackelberg model is different from the Cournot model because:

Which of the following is true of product differentiation?

Use the following figure to answer the question : Figure 13-1 : shows the Stackelberg model of a duopoly.Both firms face constant marginal costs equal to OJ and the market demand curve is AD.The Stackelberg firm produces an output of OF and OF is equal to FL. -Refer to Figure 13-1.The difference between the total industry output produced under a perfect competition model and a Stackelberg model is represented by the distance _____.

The demand curve that a monopolistically competitive firm faces is _____.

Given that OPEC [Organization of the Petroleum Exporting Countries] has been a successful cartel,all of the following factors could have contributed to its success,except:

ABC Inc. ,is a leading consumer goods conglomerate.ABC launched a new variant of their existing brand of toothpaste that claimed not only to whiten teeth within 4 weeks but also fight cavities.In other words,ABC was practicing _____.

Government intervention in monopolistically competitive industries is probably not warranted because:

Which of the following is not true of a monopolistically competitive firm in long run equilibrium?

Assume that a group of countries that produce 50 percent of the world's coffee decide to limit their coffee production and exports to increase their income from the sale of coffee.Which of the following are necessary for this cartel to operate successfully?

How does the Cournot model of oligopoly differ from the Stackelberg model?

Use the following figure to answer the question : Figure 13-2 : shows the market demand curve [DD'],the supply curve of the fringe firms [S_F],the cartel's marginal cost curve [MC₀],and the cartel's marginal revenue curve [MR₀].Assume that the cartel behaves like a dominant firm. -Refer to Figure 13-2.If the market had been perfectly competitive,the equilibrium price and output would be _____ respectively.

Suppose a cartel is formed by the tomato farmers.Which of the following would increase the ability of this cartel to set output and prices in the domestic market?