Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 10, Problem 6P
To determine
The reasons for
Concept Introduction:
When prices are determined by a dominant company and this price is followed by others in the same market, this is called Price Leadership.
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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)?
Question 36
Oligopoly differs from monopolistic competition in that
Group of answer choices
oligopolies have few buyers, while monopolistically competitive markets have many buyers.
oligopolies face downward-sloping demand curves, while monopolistic competitors face horizontal demand curves.
mutual interdependence is essential in monopolistic competition.
each monopolistically competitive seller produces a slightly differentiated product.
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
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- 23. 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_forwardWhat 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_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_forward1.Microsoft is one of the leading software companies. Prior to 2000, Microsoft’s share of the market for personal computer operating systems stood above 80 per cent. However, since the twenty-first century Microsoft’s market share has steadily declined to 40 per cent. This is due to the rise in competing software producers such as Apple macOS (10%), Google's Android OS (35%), Linux Operating System (35%), and Apple iOS (5%). The market share of each company is provided in parentheses. Google and Linux have decided that it would be in their best interest to work together to serve the market. This is not common knowledge to the person’s outside of the companies. i. Draw how equilibrium price and quantity are determined in this industry. Hi does this refer to the monopoly market structure diagrams? 2. Allsmart’s demand curve is given by Q=10-P for its dishwashers. The marginal and average cost is $3 per dishwasher produced. Complete the following table. Photo below concerns…arrow_forward5. The Key feature of Oligopoly is interdependence – we saw this in both traditional models and using game theory. a. Explain why price can be very rigid for an oligopoly using the “Kinked Demand Model”: b. Explain how an oligopoly can simultaneously take one features seen for a monopoly and for perfect competition using the “Price Leader Model”: c. Describe how the Hirchmann Herfindahl Index (HHI) provides a more acquire measurement of market concentration than a simple Concentration Ratio like CR4: d. What is the actual dilemma in a “Prisoners’ Dilemma” type of game? e. What is the main reason why real-world Cartels have such a hard time function well?arrow_forward
- 16-1. Two equal sized newspaper have an overlap in circulation of 10% (10% of the subscribers subscribe to both newspaper). Advertisers are willing to pay $10 to advertise in one newspaper but only $19 to advertise in both , because they’re are unwilling to pay twice to reach the same subscribers. What’s the likely bargaining negotiation outcome if the advertisers bargain by telling each newspaper that they’re going to reach an agreement with the other newspaper so the gains to reaching agreement are only $9? Suppose the two newspaper merge. What is the likely post merger bargaining outcome?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_forward56.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?arrow_forward
- 16-1 Newspaper Bargaining Two equal-sized newspapers have an overlap in circulation of 10% (10% of the subscribers subscribe to both newspapers). Advertisers are willing to pay $10 to advertise in one newspaper but only $19 to advertise in both, because they’re unwilling to pay twice to reach the same subscribers. What’s the likely bargaining negotiation outcome if the advertisers bargain by telling each newspaper that they’re going to reach an agreement with the other newspaper, so the gains to reaching agreement are only $9? Suppose the two newspapers merge. What is the likely post-merger bargaining outcome? these would be most advantageous from a bargaining position?arrow_forwardEconomics 1. Firms 1 and 2 compete in a Cournot duopoly. If firm 2 adopts a strategy that raises firm 1's marginal cost, Multiple Choice a)firm 1 will reduce its output. b)firm 2 will gain market share. c)firm 2 will enjoy higher profits. d)firm 1 will reduce its output and firm 2 will gain market share and enjoy higher profits.. 2. Firms 1 and 2 compete in a Cournot duopoly. If firm 2 adopts a strategy that raises firm 1's marginal cost, Multiple Choice a)firm 1 will increase its output. b)firm 2 will lose market share. c)firm 1 will enjoy higher profits. d)firm 1 will not increase its output nor enjoy higher profits nor will firm 2 lose market share. **Yes, these are two different questions. Please answer asap. Thank you!**arrow_forward1. 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_forward
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