Oligopoly is difficult to analyze because a ) of the complex interdependence that usually exists among oligopolistic firms. b ) there is no price competition among oligopolistic firms. c ) price is NOT a decision variable for oligopolistic firms. d ) there is price competition among oligopolistic firms but no competition on product quality.

Oligopoly is difficult to analyze because a ) of the complex interdependence that usually exists among oligopolistic firms. b ) there is no price competition among oligopolistic firms. c ) price is NOT a decision variable for oligopolistic firms. d ) there is price competition among oligopolistic firms but no competition on product quality.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 1CQQ

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Which strategy—non-cooperative or cooperative strategy—has a better result/outcome in the context of an oligopolistic industry and explain why it is better than the other strategy.
Three oligopolistic firms ("1", "2" and "3") conduct quantity competition in a certain market. The interactions between them take place as follows: firm 1 defines its production quantity, which is immediately observed by firms 2 and 3; then, firm 2 makes its decision on how much it will produce, and only after observing the decisions of firms 1 and 2 does firm 3 finally make its respective choice. Furthermore, the total costs of firms 1, 2 and 3 correspond respectively to c₁(q₁) = 10q₁, c₂(q₂) = 8q₂ and c₃(q₃) = 2q₃, and the firms face a (inverse) demand given by p(Q) = 110 - Q (where Q = q₁ + q₂ + q₃). Based on this information, determine what will be the total amount produced by the firms in the (single) ENPS for that game. (Note: the correct answer is an integer.)
The oligopoly market structure is characterized by several defining qualities on of which is either similar or identical characteristics, which others describe the oligopolistic market structure.
The long-term planning in the oligopoly market should consider the reactions of other participants. In other words, any decision taken in an oligopoly market should have a cooperative outcome.Cooperation in an oligopoly means that the competing businesses collectively make the decision to cooperate which makes them stand in a better position. It increases the profitability of all firms involved. Please Answer the following question: How is a cooperation achieved by firms? Please discuss.
Consider an oligopolistic industry with N competing firms. Suppose that these firms have no fixed costs and that they all have the same marginal costs. Each firm must choose what quantity to produce independently of each other, and all firms must choose at the same time. If we increase the number of firms in this industry (to for example N+1), the market price a.increases b.decreases c.remains unchanged d.becomes nil e.none of the above
Indicate if the following characteristics exist in oligopolistic market by putting a check (√) on the blank before those that are and a cross (x) for those that are not. _______ 1. Easy entry into the market. _______ 2. Uniform pricing of product _______ 3. Interdependence of action among sellers _______ 4. Products sold may be homogeneous or differentiated. _______ 5. Prevalent nonprice competition _______ 6. Sellers enjoy a degree of market control. _______ 7. The seller’s marginal revenue is lower than price. _______ 8. Profit is maximized where MR = MC. _______ 9. A dec+-rease in the price of one seller is usually matched by price decreases of his rivals. _______ 10. The marginal revenue curve is truncated.
Q1. Which is which? Identify the oligopoly model based on the description. Two Firms, high barriers to Entry, Firms sell identical goods, Firms simultaneously choose output______(a. Cournot Duopoly b. Monopolistic Duopoly c. Bertrand Duopoly d. Stackelberg Duopoly) Two Firms, high barriers to entry, Firms sell identical goods, Firms simultaneously choose prices______(a. Stackelberg Duopoly b. Bertrand Duopoly c. Hotelling Duopoly d. Cournot Duopoly) Few Firms, low barriers to entry, firms sell substitutes but differentiated goods______(a. Monopolistic Competition b. Bertrand Oligopoly c. Bertrand Competition with Differentiated Goods d. Cournot Oligopoly) Two firms, high barriers to entry, firms sequentially choose output______(a. Stackelberg Duopoly b. Bertrand Duopoly c. Cournot Duopoly d. Monopolistic Competition)
Suppose an established manufacturer in an oligopoly market introduces 10 new varieties of products in the same year. Which of the following is a possible outcome of this action? Group of answer choices It will reduce the startup cost for a new entrant. It will lead to a decrease in the demand for the products of the manufacturer. It will lead to a fall in the profit earned by the firm. It will crowd out new entrants into the market. It will help the manufacturer increase the price of its products.
New, small firms often have trouble competing in oligopolistic industries because they cannot achieve the economies of scale the established, large firms enjoy. is this true or false
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Consider an oligopolistic industry with N competing firms. Suppose that these firms have no fixed costs and that they all have the same marginal costs. Each firm must choose what quantity to produce independently of each other, and all firms must choose at the same time. If we decrease the number of firms in this industry (to, for example N−1), the market price Group of answer choices A. increases B. decreases C. remains unchanged D. becomes nil E. none of the above
When does cut-throat competition happen with oligopolistic firms? Group of answer choices When each firm acts more like a monopoly and colludes with each other to set prices in the market. When the firms compete hard and to stop acting like perfect competitors by driving up costs which leads in the long-run to higher profits. When the firms push each other with stiff competition acting like perfect competitors driving down costs, which in the long-run leads to zero profits.