Question 1

What is a Nash equilibrium? Is this equilibrium the best outcome for the players? Give an example.

Accepted Answer

John Nash proposed the concept of an equ

Question 2

Does an oligopoly produce the efficient quantity of output or does it create a deadweight loss? Do the firms want to produce the efficient quantity of output? Explain your answer.

Accepted Answer

An oligopoly might or might not operate

Question 3

A Nash equilibrium
I.is named after the Nobel prize winning economist,John Nash.
Ii.occurs when each player chooses the best strategy given the strategy of the other player.
Iii.must give the best possible outcome for each player.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) ii and iii 
A) i only 
B) ii only 
C) iii only 
D) i and ii 
E) ii and iii

Question 4

How would a merger between Coca-Cola and Pepsi Cola affect the four-firm concentration ratio for the soft drink market? How would it affect the Herfindahl-Hirschman Index for the soft drink market?

Accepted Answer

Both Coca-Cola and Pepsi Cola are among

Question 5

Entry and exit continue in monopolistic competition until the remaining firms are

Accepted Answer

A) earning an economic profit. 
B) incurring an economic loss. 
C) earning less than a normal profit. 
D) earning zero economic profit. 
E) producing the normal amount of product differentiation. 
A) earning an economic profit. 
B) incurring an economic loss. 
C) earning less than a normal profit. 
D) earning zero economic profit. 
E) producing the normal amount of product differentiation.

Question 6

-The table above shows the revenue figures for the top four firms along with a total for the remaining firms in the fast-food industry.What is the four-firm concentration ratio for the industry?

Accepted Answer

A) 200 
B) 20 percent 
C) 25 percent 
D) 80 percent 
E) 100 percent 
A) 200 
B) 20 percent 
C) 25 percent 
D) 80 percent 
E) 100 percent

Question 7

Which of the following is the best example of a differentiated product?

Accepted Answer

A) beets in the local supermarket 
B) diamonds 
C) airlines 
D) running shoes 
E) electricity 
A) beets in the local supermarket 
B) diamonds 
C) airlines 
D) running shoes 
E) electricity

Question 8

Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.

Accepted Answer

The additional selling costs from produc

Question 9

Nike is a firm in monopolistic competition.If Nike is earning an economic profit from new cross-training shoe,over time the demand for these shoes

Accepted Answer

A) increases as new firms enter the market. 
B) decreases as new firms enter the market. 
C) does not change as new firms enter the market. 
D) decreases as firms exit the market. 
E) increases as firms exit the market. 
A) increases as new firms enter the market. 
B) decreases as new firms enter the market. 
C) does not change as new firms enter the market. 
D) decreases as firms exit the market. 
E) increases as firms exit the market.

Question 10

Collusion results when a group of firms
I.act separately to limit output,lower prices,and decrease economic profits.
Ii.act together to limit output,raise prices,and increase economic profits.
Iii.in the United States legally fix prices.

Accepted Answer

A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) ii and iii 
A) i only 
B) ii only 
C) iii only 
D) i and iii 
E) ii and iii

Question 11

The prisoners' dilemma is

Accepted Answer

A) an example of a duopoly game. 
B) a theory about why firms break the law. 
C) competition that can occur among firms in monopolistic competition. 
D) an example of the monopolist charging high prices. 
E) an example of a game that does not have a Nash equilibrium. 
A) an example of a duopoly game. 
B) a theory about why firms break the law. 
C) competition that can occur among firms in monopolistic competition. 
D) an example of the monopolist charging high prices. 
E) an example of a game that does not have a Nash equilibrium.

Question 12

-The above figure shows the market for the three moving companies in a small nation.If the movers act as perfect competitors,what is the price per mile and the number of miles per year? If the movers collude and act as a single monopoly,what is the price per mile and the number of lines per year?

Accepted Answer

If the movers compete,production will be

Question 13

In the long run,firms in monopolistic competition produce at a level that is ________ the efficient scale of output.

Accepted Answer

A) less than 
B) equal to 
C) more than 
D) not comparable to 
E) All of the above are possible depending on market conditions. 
A) less than 
B) equal to 
C) more than 
D) not comparable to 
E) All of the above are possible depending on market conditions.

Question 14

At a long-run equilibrium in monopolistic competition,price equals

Accepted Answer

A) average total cost. 
B) marginal cost but not marginal revenue. 
C) marginal revenue but not marginal cost. 
D) zero. 
E) marginal revenue and marginal cost. 
A) average total cost. 
B) marginal cost but not marginal revenue. 
C) marginal revenue but not marginal cost. 
D) zero. 
E) marginal revenue and marginal cost.

Question 15

Oligopoly is

Accepted Answer

A) always efficient. 
B) efficient only if the firms cooperate. 
C) efficient only if the firms play non-repeated games. 
D) generally not efficient. 
E) efficient only if the firms innovate. 
A) always efficient. 
B) efficient only if the firms cooperate. 
C) efficient only if the firms play non-repeated games. 
D) generally not efficient. 
E) efficient only if the firms innovate.

Question 16

If a duopoly has reached the monopoly outcome,a firm can increase its profit if it and it alone ________ its price and ________ its production.

Accepted Answer

A) raises;increases 
B) raises;decreases 
C) lowers;increases 
D) lowers;decreases 
E) raises;does not change 
A) raises;increases 
B) raises;decreases 
C) lowers;increases 
D) lowers;decreases 
E) raises;does not change

Question 17

One characteristic of monopolistic competition is that it has

Accepted Answer

A) many firms producing a slightly differentiated product. 
B) many firms producing identical goods. 
C) one firm producing a unique good. 
D) a few firms producing a slightly differentiated product. 
E) large barriers to entry. 
A) many firms producing a slightly differentiated product. 
B) many firms producing identical goods. 
C) one firm producing a unique good. 
D) a few firms producing a slightly differentiated product. 
E) large barriers to entry.

Question 18

Firms in monopolistic competition determine the profit-maximizing level of output by producing

Accepted Answer

A) the same output level as rivals do. 
B) where average total cost is minimized. 
C) at the point of minimum average fixed cost. 
D) where marginal revenue equals marginal cost. 
E) where price equals average total cost. 
A) the same output level as rivals do. 
B) where average total cost is minimized. 
C) at the point of minimum average fixed cost. 
D) where marginal revenue equals marginal cost. 
E) where price equals average total cost.

Question 19

A market with only two firms is called a

Accepted Answer

A) duopoly. 
B) two-firm monopolistic competition. 
C) two-firm monopoly. 
D) cartel. 
E) two-firm quasi monopoly. 
A) duopoly. 
B) two-firm monopolistic competition. 
C) two-firm monopoly. 
D) cartel. 
E) two-firm quasi monopoly.

Question 20

The efficiency of monopolistic competition

Accepted Answer

A) is as clear-cut as the efficiency of perfect competition. 
B) depends on whether the gain from extra product variety offsets the selling costs and the extra cost that arises from excess capacity. 
C) comes from its excess capacity. 
D) is eliminated in the long run. 
E) is equal to that of monopoly. 
A) is as clear-cut as the efficiency of perfect competition. 
B) depends on whether the gain from extra product variety offsets the selling costs and the extra cost that arises from excess capacity. 
C) comes from its excess capacity. 
D) is eliminated in the long run. 
E) is equal to that of monopoly.

What is a Nash equilibrium? Is this equilibrium the best outcome for the players? Give an example.

Does an oligopoly produce the efficient quantity of output or does it create a deadweight loss? Do the firms want to produce the efficient quantity of output? Explain your answer.

A Nash equilibrium I.is named after the Nobel prize winning economist,John Nash. Ii.occurs when each player chooses the best strategy given the strategy of the other player. Iii.must give the best possible outcome for each player.

How would a merger between Coca-Cola and Pepsi Cola affect the four-firm concentration ratio for the soft drink market? How would it affect the Herfindahl-Hirschman Index for the soft drink market?

Entry and exit continue in monopolistic competition until the remaining firms are

-The table above shows the revenue figures for the top four firms along with a total for the remaining firms in the fast-food industry.What is the four-firm concentration ratio for the industry?

Which of the following is the best example of a differentiated product?

Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.

Nike is a firm in monopolistic competition.If Nike is earning an economic profit from new cross-training shoe,over time the demand for these shoes

Collusion results when a group of firms I.act separately to limit output,lower prices,and decrease economic profits. Ii.act together to limit output,raise prices,and increase economic profits. Iii.in the United States legally fix prices.

The prisoners' dilemma is

-The above figure shows the market for the three moving companies in a small nation.If the movers act as perfect competitors,what is the price per mile and the number of miles per year? If the movers collude and act as a single monopoly,what is the price per mile and the number of lines per year?

In the long run,firms in monopolistic competition produce at a level that is ________ the efficient scale of output.

At a long-run equilibrium in monopolistic competition,price equals

Oligopoly is

If a duopoly has reached the monopoly outcome,a firm can increase its profit if it and it alone its price and its production.

One characteristic of monopolistic competition is that it has

Firms in monopolistic competition determine the profit-maximizing level of output by producing

A market with only two firms is called a

The efficiency of monopolistic competition

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 13: Monopolistic Competition and Oligopoly

What is a Nash equilibrium? Is this equilibrium the best outcome for the players? Give an example.

Does an oligopoly produce the efficient quantity of output or does it create a deadweight loss? Do the firms want to produce the efficient quantity of output? Explain your answer.

A Nash equilibrium I.is named after the Nobel prize winning economist,John Nash. Ii.occurs when each player chooses the best strategy given the strategy of the other player. Iii.must give the best possible outcome for each player.

How would a merger between Coca-Cola and Pepsi Cola affect the four-firm concentration ratio for the soft drink market? How would it affect the Herfindahl-Hirschman Index for the soft drink market?

Entry and exit continue in monopolistic competition until the remaining firms are

-The table above shows the revenue figures for the top four firms along with a total for the remaining firms in the fast-food industry.What is the four-firm concentration ratio for the industry?

Which of the following is the best example of a differentiated product?

Explain how selling costs in monopolistic competition affect the efficiency of monopolistic competition.

Nike is a firm in monopolistic competition.If Nike is earning an economic profit from new cross-training shoe,over time the demand for these shoes

Collusion results when a group of firms I.act separately to limit output,lower prices,and decrease economic profits. Ii.act together to limit output,raise prices,and increase economic profits. Iii.in the United States legally fix prices.

The prisoners' dilemma is

-The above figure shows the market for the three moving companies in a small nation.If the movers act as perfect competitors,what is the price per mile and the number of miles per year? If the movers collude and act as a single monopoly,what is the price per mile and the number of lines per year?

In the long run,firms in monopolistic competition produce at a level that is ________ the efficient scale of output.

At a long-run equilibrium in monopolistic competition,price equals

Oligopoly is

If a duopoly has reached the monopoly outcome,a firm can increase its profit if it and it alone ________ its price and ________ its production.

One characteristic of monopolistic competition is that it has

Firms in monopolistic competition determine the profit-maximizing level of output by producing

A market with only two firms is called a

The efficiency of monopolistic competition

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

If a duopoly has reached the monopoly outcome,a firm can increase its profit if it and it alone its price and its production.