Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 10, Problem 11P
To determine
The difficulty in predicting a firm’s behavior under oligopoly.
Concept Introduction:
Oligopoly refers to a market which is dominated by a small number of large sellers (oligopolists). Oligopoly has its own market structure.
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Question1
Next time you are shopping at the supermarket (or imagine you are there), what is a good example of a good (not a brand name) that is sold in an oligopoly market? What is the good? What are the major manufacturers (be sure to turn the package over so you are now confusing brand names with the manufacturer)? Which characteristics of an oligopoly market are shown here (few dominant producers; identical prices; high barriers to entry)?
1. Characteristics of oligopoly
An oligopolistic market structure is distinguished by several characteristics, one of which is difficult entry. Which of the following are other characteristics of this market structure? Check all that apply.
Market control by many small firms
Market control by a few large firms
Neither mutual interdependence nor mutual dependence
Either similar or identical products
Mutual interdependence
56.Assume that an oligopoly's four enterprises are forming a pact to cooperate. How might the ease of entry into their industry influence how much they charge?
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- 1. In oligopoly a.) firms compete with each other only by raising and lowering quantity because prices are fixed b. )the fewness of firms creates mutual interdependence in pricing among the firmsarrow_forward5. How does the number of firms in an oligopoly affect the outcome in the market?arrow_forward6.Define oligopoly in your own words and elaborate on the characteristics of oligopoly?arrow_forward
- What is the big advantage of oligopoly? Question 10 options: Oligopolies are more predictable than monopolistic competition or a monopoly. As an economy of scale oligopoly may produce more goods with a lower cost of production. Oligopolies will always promote technological progress. Trade wars between oligopolies stimulate healthy competitionarrow_forwardTopic: Oligopoly Please answer the following questions (1,2&3) 1.) What are the implications of price leadership for the oligopoly market? 2.) Explain why firms might want to collude? 3.) Oligopolists often possess too much monopoly power. Evaluate whether governments should intervene in oligopolist markets.arrow_forward1. compare the quantity and price of an oligopoly to those of a monopoly 2. compare the quantity and price of an oligopoly to competitive marketarrow_forward
- 1. Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is either similar or identical products. Which of the following are other characteristics of this market structure? Check all that apply. Market control by many small firms Market control by a few large firms Mutual dependence Mutual interdependence Difficult entryarrow_forward23. The kinked oligopoly demand curve does NOT describe the demand curve for monopolistic competition because in monopolistically competitive markets.... a. Firms are not as interdependant as oligopolistic firms. b. Firms have no market power. c. There is not as much product differentiation as in oligopoly. d. There is no non-price competitionarrow_forward60A- What is the dominant strategy for Firm B? What is the dominant strategy for Firm A? Explainarrow_forward
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