which is not a characteristic of oligopoly which is not a characteristic of oligopoly

In the credit card industry, for example, Visa and MasterCard have a duopoly.read more. Course Hero is not sponsored or endorsed by any college or university. You are free to use this image on your website, templates, etc., Please provide us with an attribution link. Marketers highlight the distinguishing features in the product commonly through packaging or a good design, which helps communicate the benefitting factors to the shoppers. Why Developing Countries Should Focus on International Trade? C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." d) Firms choose strategies at the same time. *Cause price wars during business recessions C) the HHI for the industry is small. b) its rivals match price increases and price decreases When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. Which of the following is characteristic of oligopoly, but not of monopolistic competition? The market has been shared equally by firms A and B, The cost of firm A is lower than firm BProfit maximizing the output of firms A is XA and the price is PA. Firm B adopts this price and sells XB(=XA) amount. The first firm to move in a sequential game has an advantage by establishing a ____ _____ that is favorable to them. Impure because have both lack of b) By increasing recruiting expenses In an oligopoly, dominant market players are influential enough to decide on the price of products and services. read more, market demand, and product differentiationProduct DifferentiationProduct differentiation refers to making a product look attractive and different from other products in the same class. Such companies have complete control of the market, earning high profits and gains in a specific sector or service. OA. b) flexible a) collusion; cartel e) may be no more efficient due to a lack of firm interdependence, c) may be less desirable because they are not regulated by government to protect consumers. OA. debt to equity ratio and that it will be reversed whenever the presidents friend wants the Strategic independence. B) a market where two firms compete for profit and market share. Marilyn Cox is the office manager for DTR Inc. DTR constructs, owns, and manages apartment The number of suppliers in a market defines the market structure. C) assumes that marginal revenue equals marginal cost only at the quantity at the "kink." Sweezy Oligopoly - based on a very specific assumption regarding how other firms will respond to price increases and price cuts. 6) Wal-Mart follows the kinked demand curve model of oligopoly. Marginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. 4. B) collusion Which of the following is not a characteristic of an oligopoly? a) There are a few large firms that make up the industry. A) Strategic Independence d) Localized markets, Suppose the rivals of an oligopolistic firm ignore both a price increase and decrease. The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. b) Its demand curve is downward-sloping A) only Bob would like to change his decision. D) a prisoner has no incentive to confess to his crime, and stands a greater chance of not going to prison. a- Compute the Cournot equilibrium total quantity, price, quantity for each firm, and . Oligopoly. single family housing and would be an attractive site for single family homes. c) through product development It is one of the four market situations, including perfect competitionPerfect CompetitionPerfect competition is a market in which there are a large number of buyers and sellers, all of whom initiate the buying and selling mechanism. *It lowers search costs of information for consumers. c) It will always be kinked because it is a price maker. C) 2. The marginal revenue formula computesthe change in total revenue with more goods and units sold." a) Affect profits and influence the profits of rival firms A Computer Science portal for geeks. 11) Once a cartel determines the profit-maximizing price, E) 10,000. c) An outcome in the payoff matrix from which neither firm wants to deviate since the current strategy is optimal given the rival's strategic choice. As a result, each firm obligates to adhere to pre-determined price and quantity/output levels to maximize revenue. d) can set its price and output to maximize profits. It includes decisions made in concentrated markets, such as product prices, quality standards, and production planning. *It eliminates competition among firms. *The game would temporarily move to either cell B or cell C. Mutual interdependence among the firms in decision making is the essential feature of the oligopolistic market. *price elasticity of demand Here, they focus on each other and try to exceed customer expectations in every possible way. *To obtain lower input prices D) neither is protected by high barriers to entry. a) inelastic A) Each firm faces a downward-sloping demand curve. *Ownership and control of raw materials c) allocative efficiency but not productive efficiency *dominant firms Chapter 15: Monopolistic Competition and Olig, Pesticide Applicator Certification Core Manual, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal. E) All of the above. e) through cartels, c) through product development Consequently, the sales of the other firm will be definitely reduced by the same percentage. d) monopolistically competitive market, The study of how one firm reacts to the actions taken by another firm or individual when implementing a strategy is called _____. d) The market contains a few large producers. So go ahead and leave a comment below. at least $10 million. Their differences can range from. The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. C) equilibrium price will be sensitive to small cost changes but quantity will not. B) the courts. E) marginal cost. 6) According to the kinked demand curve theory of oligopoly, at the quantity corresponding to the kink, the firm's Marginal costMarginal CostMarginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. They do so through collusion that results in higher prices and fewer production or product choices for customers. A) each firm can act like a monopoly. $3. a) localized markets a) Firms have no control over their price. Firms are more likely to cheat on a collusive agreement when the economy is experiencing a _____ (Enter one word). 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Which of the five do you feel is the most important? Marilyn 8) Which of the following quotes shows a contestable market in the widget industry? E) the firms are interdependent. E) none of the above. B) monopolists. Consequently, each firm must condition its behavior on the behavior of the other firms. a) They move downward and to the right to a lower operating point on the average-total-cost curve. b) potential for mergers and acquisitions C) lower the price of their products. D) There is more than one firm in the industry. Consider a simple case of three firm oligopoly. (Pure) Monopoly 3. An oligopoly is a market state where there is a limited amount of competition available for consumers to consider. d) does not influence. A) oligopolists. O D. Some barriers to entry. d) strategic theory. Is Microsoft an oligopoly Do you want to know Click Here. Pure (Perfect) Competition. c) Dominant firms A) in a single-play game or a repeated game. d) both productive efficiency and allocative efficiency, b) neither productive efficiency nor allocative efficiency. b) An outcome in the payoff matrix from which both firms want to deviate since the current strategy is not optimal for either firm. *The firm's demand curve will shift further to the right. (Enter one word per blank. The financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. Firm 1 cost function is TC (9) = 20 + 12q + q, while firm 2 cost function is TC (9) = 50 +8q2 + q . This represents what kind of problem with the four-firm concentration ratio? A) This game has no dominant strategies. b) The number of employees in an industry who ever have or are currently working for one of the four largest firms a) purely competitive market Hence, undoubtedly it will react to the price reduction decision. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. D) specify how average cost is determined. B) there are two producers of two goods competing in an oligopoly market Which of the following statements correctly describes Dr. Smith's strategy given what Dr. Jones may do? document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 2023 . C) strategies It helps avoid the potential price war and price rigidity. Four characteristics of an . A duopoly is b) The possibility of price wars diminishes, but profits might be lower. a) Its demand curve is downward-sloping D) products that are slightly different. e) undefined, In the graph, the price elasticity of demand is highly ______ above the price of P0. What are the four characteristics of market structure? e) Price leadership model, In the _______ model of oligopoly, firms react to price decreases but ignore price increases by other firms. a) prices; uncertainty; increase d) game theory. the breakkkk, The fact that industry concentration may be overstated because the four-firm concentration ratio only accounts for production within the United States represents what kind of shortcoming with the four-firm concentration ratio? 4. C. The choices made by one firm have a significant effect on other firms. *world trade 13) Complete the following sentence. When firm X increases its price. East Asian regimes tend to have similar characteristics First they are orien. the students used balls . Oligopoly is a market with a few firms and in which a market is highly concentrated. The total market demand is P(Q) = 50 - 2Q, where Q is the total quantity produced by all (active) firms in the industry. A) suggests that price will remain constant even with fluctuations in demand. 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in The characteristics of an oligopoly market or oligopolistic strategy are mentioned below: Interdependence . 8) A weakness of the kinked demand curve theory of oligopoly is that it does not *It helps reduce demand for material products. *It enhances competition and reduces monopoly power. D. Th; Which of the following is a characteristic of an oligopoly market structure? D) equilibrium quantity will be sensitive to small cost changes but price will not. b) price leadership; collusion A situation where firms meet to fix prices, divide markets, or restrict competition is called ______. ENGL1190_V0854_2023WI_Communications23.docx. A) all members of the cartel have a strong incentive to abide by the agreed-upon price. C) Miller has a dominant strategy but Bud does not. a) price changes occur slowly *To increase control over the product's price Some of its fundamental characteristics include the existence of a small number of firms, differentiated or homogeneous products, and barriers to entry. 12) Which one of the following quotations best describes the kinked demand curve model of oliogopoly? Oligopoly Models: 1. These firms are large enough that their quantity influences the price and so impacts their rivals. read more curve results in a convex bend, known as kink. a) payoff a) Kinked-demand curve model Monopolistic Competition and Economic Efficiency, Monopolistic Competition Equilibrium| Long-run, Short-run, What is Inflation Mean | Definitions, Types, Causes, How to Calculate the GDP [Definition & Formula], Main Theories of Inflation (With Diagram), Indifference Curve Q&A [Download Indifference Curve Pdf]. What kind of game is it when firms choose their optimal pricing strategy today without worrying about possible interactions in the future? What does a demand curve look like for an oligopolistic firm? bc it's similar to monopoly but has the difference of having more firms lol. Select one: O a. there are a few firms that are mutually interdependent O b. when one firm in an oligopoly raises its price, other firms will follow O c. firms may collude in order to act like a monopoly O d. barriers to entry exist to limit the entrance of new firms D) A and B. read more, and marginal revenue is the product price. c) Nash equilibrium ENGL1190_V0854_2023WI_Communications23.docx. as the price increases, demand decreases keeping all other things equal. How are profitability and risk impacted by changes in the current liabilities to total assets ratio? b) it will lower the firm's costs Market players in an oligopolistic market focus on non-price competition, ensure their brands are uniquely identifiable and apply hidden advertising tactics. For example, when a government grants a patent for an invention to one firm, it may create a monopoly. b) Interindustry competition a) It could be downward or upward sloping. C) both have MR curves that lie beneath their demand curves. *Prohibit the entry of new rivals. c) product development and advertising are relatively inexpensive In December, General Motors produced 6,600 customized vans at its plant in Detroit. The concentration ratio is a tool that measures the market share leading companies have in an industry. b) product development and advertising are relatively difficult to copy 13) A dominant firm oligopoly might be one for which the Herfindahl-Hirschman Index is