Exam 14: Oligopoly: Firms in Less Competitive Markets

In a Nash equilibrium,all players select non-dominant strategies.

In an oligopoly market

Prices of PlayStation 4 game systems are similar at almost every large retailer and little price competition occurs among these retailers.An explanation for this is

Oligopoly differs from perfect competition and monopolistic competition in that

Table 14-4 Alistair Luggage and Baine Baggage are the only firms selling luggage in the upscale town of Montecito. 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 14-4 shows the payoff matrix for this advertising game. -Refer to Table 14-4.Does Baine have a dominant strategy and if so,what is it?

According to an article the Wall Street Journal,"The big car makers are pushing a wide array of new technology into production,responding to relentless competitive pressure, Rising energy prices and consumer demand for better safety. Source: Joseph B.White,"Ford,GM Eye Shift in Buying Habits," Wall Street Journal,May 22,2006. Which of Porter's competitive forces does this statement allude to?

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

Competition in the form of advertising,better customer service,or longer warranties can also reduce profits by raising costs.

In recent years online bookseller Amazon.com has lowered its profits by offering some of its customers free shipping and building more warehouses to hold its inventories.Which of the following explains Amazon.com's actions?

All games share three characteristics.Two of these characteristics are rule and strategies.What is the third characteristic called?

What is the difference between explicit collusion and implicit collusion?

Producing a differentiated product occurs in which of the following industries?

Interdependence of firms is most common in

Figure 14-2 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 14-2 shows the decision tree for this game. -Refer to Figure 14-2.Now suppose that the government delays Xenophone's entry and Gigacom moves first,what is the likely outcome in the market?

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.

When large firms in oligopoly markets cut their prices

In Michael Porter's five competitive forces model,what do the competitive forces determine?

Suppose two firms in a duopoly implicitly collude and charge a high price.How might each firm benefit from advertising that it will match the lowest price offered by its competitor?

A set of actions that a firm takes to achieve a goal is the definition of a

Which of the following is not a reason why government officials are willing to impose entry barriers?