b) depends on the firm's cost structure The number of suppliers in a market defines the market structure. These data are as follows: 30.334.531.130.933.731.933.131.130.032.734.430.134.631.632.432.831.030.230.232.831.130.733.134.431.032.230.932.134.230.730.730.730.630.233.436.830.231.530.135.730.530.630.231.430.730.637.930.334.130.4\begin{array}{lllll}30.3 & 34.5 & 31.1 & 30.9 & 33.7 \\ 31.9 & 33.1 & 31.1 & 30.0 & 32.7 \\ 34.4 & 30.1 & 34.6 & 31.6 & 32.4 \\ 32.8 & 31.0 & 30.2 & 30.2 & 32.8 \\ 31.1 & 30.7 & 33.1 & 34.4 & 31.0 \\ 32.2 & 30.9 & 32.1 & 34.2 & 30.7 \\ 30.7 & 30.7 & 30.6 & 30.2 & 33.4 \\ 36.8 & 30.2 & 31.5 & 30.1 & 35.7 \\ 30.5 & 30.6 & 30.2 & 31.4 & 30.7 \\ 30.6 & 37.9 & 30.3 & 34.1 & 30.4\end{array} Which of the following is not a characteristic of oligopoly? D) firms in perfect competition. D) in neither a repeated game nor a single-play game. 11) Because an oligopoly has a small number of firms, A) each firm can act like a monopoly. Prisoners' dilemma describes a case where Business Economics Consider a Cournot oligopoly with n = 2 firms. It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. An oligopoly in economics refers to a market structure comprising multiple big companies that dominate a particular sector through restrictive trade practices, such as collusion and market sharing. d) strategic theory. Eco Finals - Lesson 1 | PDF | Monopoly | Oligopoly It also means that each firm must be aware of the reaction of others to their actions. c) price leadership; cartel Thus, each firm gains a considerable market share with minimal potential profits. A characteristic found only in oligopolies is A) break even level of profits. A duopoly is If the products of the firms are differentiated the degree of interdependence is then weakened. E) All of the above. a) collusion; cartel A) is; to comply regardless of the other firm's choice If a firm assumes that its rivals will match all price changes, but the firm's rivals actually charge a lower price what are the potential consequences? Course Hero is not sponsored or endorsed by any college or university. Its main characteristics are discussed as follows: 1. A) kinked demand curve. The characteristics of an oligopoly market or oligopolistic strategy are mentioned below: Interdependence . The group that colludes is referred to as a cartelCartelA cartel is a group of producers of goods or suppliers of services formed through an agreement amongst themselves to regulate the supply of goods or services with the basic intent to illegally regulate the prices or restrict competition regarding the said goods or services.read more. B) both prisoners deny. d) game theory. 31) Refer to Table 15.3.7. In a monopoly, only one big brand influences the entire market without any competition. Managerial Economics - Oligopoly We can conclude that industry A is. Increasing returns to scale is a term that describes an industry in which the rate of increase in output is higher than the rate of increase in inputs. Land Rights and Expropriation in Ethiopia - academia.edu You'll get a detailed solution from a subject matter expert that helps you learn core concepts. they set up a 1 meter (100 cm) track. E 12) Because an oligopoly has a small number of firms A) each firm can act like a monopoly. What would have been DTRs debt to equity ratio if the$10 million of stock had not been A few firms control most of the production and sale of a product. b) Collusive pricing model And rest of the businesses or minor players follow the same. In doing so, they reduce production and increase prices, a phenomenon called collusion. $3. Thus, it induces interdependence in the network. In other words, Therefore, within the oligopoly market the "ordinary" producers must have careful preparation to follow the changes in a policy coming from the main producers. Without collusion, if a firm incorrectly assumes that its rivals will charge the same price but its rivals actually charge a lower price, the firm's demand curve will shift to the ____. Based on the payoff matrix, if the two firms agreed to both follow national strategies there is an incentive for them to cheat. *Cause price wars during business recessions C) strategies D) zero. B) Other firms will enter the industry. b) pure monopoly *localized markets, *dominant firms C) other firms will raise their prices by an identical amount. 8) Firm X is competing in an oligopolistic industry. Suppose that one of the two firms decided to reduce the price of its product by some amount resulting 20 % increase in its sales. Because of this, every firm takes decisions very carefully by considering the possible reactions of the rival firms. Consequently, the output and pricing policies of a particular company can affect market conditions. Oligopoly theory | Industrial economics | Cambridge University Press Which of the following is not a characteristic of oligopoly? *manipulating consumer preferences Oligopoly. C) average total cost. D) neither is protected by high barriers to entry. B) neither player would be willing to change his or her decision unless the other player also changes his or her decision. However, at this price profit of firm B is not maximized.The profit-maximizing price of firm B isPB (>PA) and the quantity is Xbe (Characteristics of Oligopoly - QS Study Each firm is so large that its actions affect market conditions. If this occurs, then the firm's demand curve will look ______. d) achieve greater allocative efficiency but lesser productive efficiency, c) give the appearance of increased competition a) is needed in A) there are fewer than 6 firms in a market 2) In the dominant firm model of oligopoly, the larger firm acts like When the number of firms in an oligopolistic industry increases from 3 to 10, it is ______ to collude. 13) Complete the following sentence. Which is not a characteristic of oligopoly a each - Course Hero A) 0. In the graph, the price elasticity of demand is ______ below the price of P0. 8) Which of the following quotes shows a contestable market in the widget industry? However, firm B follows the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. c) threatens True or false: A one-time game occurs when firms will choose their pricing strategy for today without concern about future interactions with their rivals. Oligopolists do not compete with each other. In a(n) _____ game one firm moves first, committing to a strategy and then the rival firm responds. Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. c) costs; uncertainty; increase a) An outcome in the payoff matrix from which one firm wants to deviate since the current strategy is not optimal given the rival's strategic choice. C) the same as a monopoly. Characteristics and Features of Oligopoly (6 Answers) Oligopolies are typically composed of a few large firms. *To increase economies of scale. The other two share the rest (20%). A) "Gas prices in this town always go up and down together." *The firm's profits will be higher. C) if Jane does not change her decision, Bob would like to change his. b) demand theory xxx\underline{\phantom{\text{xxx}}}xxx. Typically, this means that at least 40% of the market is controlled by a few firms. b) upward-sloping 11) Which one of the following quotations best describes a dominant firm oligopoly? A)Each firm faces a downward -sloping demand curve. A) is; all other firms act as if they are perfectly competitive B) is not; other firms can enter, which increases supply, decreases the price, and drives economic profit down to zero Barriers to entry into an oligopoly most resemble those of a ______. c) Its marginal cost curve is made up of two segments Oligopoly as a market structure is distinctly different from other market forms. It is an essential component of marketing strategy leading to brand recognition and business growth. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. d) By updating manufacturing equipment, What is the four-firm concentration ratio? The control of oligopolists over specialized inputs, such as resources, price, and production, makes it difficult for a new firm to survive. B) interdependence of firms. However, too much price decrease can lead to a price warPrice WarA price war is a competition among the competitors of the business in lowering the price of their products to gain an advantage over their competitors in price and capture a greater market share. *The firm is failing to produce at the profit-maximizing output. b) collusion model c) They move leftward and upward to a higher point on the average-total-cost curve. 12) Because an oligopoly has a small number of firms Greater the number of firms, the higher the degree of interdependence. E) marginal revenue curve is upward sloping. Mr. mann's science students were experimenting with speed. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. 6) In the prisoners' dilemma with players Art and Bob, each prisoner would be best off if A) both prisoners confess. D) Consumers will eventually decide not to buy the cartel's output. The need to spend a huge amount of money on name recognition and market reputation may discourage entry by new firms. E) None of the above. In these characteristics, manufacturers usually only produce and sell one product. . is the demand curve for taxi rides in a town, and, 14) Refer to Figure 14.1.1. Short run equilibrium in monopolyPerfect Competition: Definition, Graphs, short run, long runTop 5 characteristics of an oligopolyMonopoly Price discrimination: Types, Degrees, Graphs, ExamplesDifferent Types of Monopolies| 7 TypesMonopolistic competition assumptionsMonopolistic Competition Equilibrium| Long-run| Short-runMonopolistic Competition and Economic Efficiency. However, firm B will follow the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. Your email address will not be published. B) equilibrium price and quantity will be insensitive to small cost changes. 30.331.934.432.831.132.230.736.830.530.634.533.130.131.030.730.930.730.230.637.931.131.134.630.233.132.130.631.530.230.330.930.031.630.234.434.230.230.131.434.133.732.732.432.831.030.733.435.730.730.4. Each firm has a substantial share of the market supply. d) Oligopolistic collusion, Compared to monopolies, oligopolies ______. A) Dr. Smith advertises no matter what Dr. Jones does. The financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. price rigidity Element of monopoly. c) kinked So when an oligopolist decreases prices to increase output, others follow the path. b) Affect profits without influencing the profits of rival firms a) Import competition b) They try to avoid losses by raising prices in conjunction with rival firms. D) is; the smaller firms cannot become the dominant firm 0) If the efficient scale of production only allows three firms to supply a market, the market is a. 1. a) are monopolies *It lowers search costs of information for consumers. Each firm is so large that its actions affect market conditions. . Oligopoly Defined: Meaning and Characteristics in a Market - Investopedia Marilyn is also aware that DTR issued$10 million of common stock to a long-time friend of the c) inflexible A) only Bob would like to change his decision. a) payoff 9) Which is not a characteristic of oligopoly? 11) Once a cartel determines the profit-maximizing price, CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. 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. *To obtain lower input prices *The firm's demand curve will shift further to the right. The profit-maximizing price of firm B is PB(>PA) and the quantity is Xbe. 5. e) It could be downward sloping or kinked. It encourages existing brands to improve product quality and originality by instilling a sense of rivalry. a) Kinked-demand curve model b) its rivals match price increases and price decreases oligopoly, monopoly, monopolistic competition, pure competition pure competition, monopolistic competition, oligopoly, monopoly. The characteristics of oligopoly include interdependence, product differentiation, high barriers to entry, uncertainty, price setters. 1. c) dominant firms D)There is more than one firm in the industry. b) increasing monopoly power a) their prices will be unchanged bc it's similar to monopoly but has the difference of having more firms lol. a) The kinked-demand curve model B) raise the price of their products. b) are few in number CFA And Chartered Financial Analyst Are Registered Trademarks Owned By CFA Institute. When there are two market leaders in any industry or service, this is referred to as a duopoly. E) Firms set prices. Answer: An oligopoly is an industry which is dominated by a few firms. In second-degree price discrimination the monopolist offers a menu of quantity-based pricing options designed to induce customers to self-select based on how highly they value the product. Cost of firm A is lower than firm B Profit maximizing price and quantity of firm A is PA and XA respectively. Any decision taken by a firm in order to increase its sales would adversely affect the sales and hence profit of the other firms. The study of how people behave in strategic situations is called _____ theory. D) All of the above. The equilibrium ________ a dominant strategy equilibrium because the strategy in this game is for a firm ________. $4. What kind of problem does this represent with the four-firm concentration ratio? C) a firm in monopolistic competition. D) All of the above. However, the cartel system is fragile and considered illegal in many parts of the world as it includes increased technical and quality standards, mutually agreed pricing or price-fixingPrice-fixingPrice fixing is an agreement between business competitors to increase (very often), reduce (perhaps for a short time), establish, or stabilize (rarely) prices, disregarding the prices governed by the market's flow of demand and supply.read more, etc. a) The number of average-sized firms in an industry needed to produce sales equivalent to the four largest firms d) price changes are often difficult to match The market share of the firms is unequal. a. d) ow to receive a payout of $12 Oligopolyis a market structure Features: Many and small sellers, so that no one can affect the market A dominant-bank oligopoly confronting a competitive fringe There are two sets of banks: dominant banks and fringe banks. d) Affect costs and influence the products of rival firms, a) Affect profits and influence the profits of rival firms, Which of the following is a model used to examine oligopolistic pricing? This is different compared to the perfectly competitive market and the monopolistic market that consist of a large number of sellers whereas there is only one sole seller in the monopoly market. c) They lose most of their excess-production capability. If Marilyn believes that the $10 million stock issue was undertaken only to improve DTRs *Ownership and control of raw materials Macroprudential regulatory policies with a dominant-bank oligopoly and (Figure) summarizes the characteristics of each of these market structures. a) It could be downward or upward sloping. E) a market with two distinct products. E) produce the efficient quantity. a) depends on the actions of rivals to price changes Pure oligopoly - have a homogenous product. Which of the following is not a characteristic of oligopoly? a. the A study based on over 9,0009,0009,000 U. S. residents B) marginal cost curve is discontinuous. OA. E) a cartel. D. Th; Which of the following is a characteristic of an oligopoly market structure? It is assumed that all of the sellers sellidentical or homogenous products. c) Price war b) There are barriers to entry into the market. Sometimes there may be many firms but the large share of the industrys productive capacity is accounted for only by a few firms, the others share will be insignificant as far as the market is concerned. a) its rivals do not respond to either a price cut or price increase c) it will prevent a price war ECO-FINALS_LESSON-1 - Read online for free. Which of the following is NOT a characteristic of an oligopoly? b) competitively See more documents like . Following are the characteristics of oligopoly: Interdependence. If productivity can be increased to $0.11 vans per labor hour, how many hours would the average laborer work that month? Interdependence: The foremost characteristic of oligopoly is interdependence of the various firms in the decision making. a) inelastic You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. D) entry into the industry of rival firms will have no impact on the profit of the cartel. Social Studies, 22.06.2019 00:00. Impure oligopoly - have a differentiated product. *Ownership and control of raw materials 10) In the dominant firm model of oligopoly, the dominant firm produces the quantity at which marginal revenue equals d) their profits and sales will rise. a) Demand is highly elastic below the going price a) over collusion Why do the elements of structure, such as work specialization, formalization, span of control, chain of command, and centralization, have a tendency to change together? An oligopoly is a market state where there is a limited amount of competition available for consumers to consider. An oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. E) both are price takers. A market is deemed oligopolistic or extremely concentrated when it is shared between a few common companies. a) Its demand curve is downward-sloping A) Strategic Independence D) A and B. Which of the following is not a characteristic of an oligopoly? b) By increasing recruiting expenses Pure (Perfect) 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. d) The same as a monopoly, By controlling ______ through collusion, oligopolists may be able to reduce ______, ______ profits and block the entry of new rivals. a) are always more efficient Our assessments, publications and research spread knowledge, spark enquiry and aid understanding around the world. To further understand market modules follow the below topics. 3) Which one the following industries is the best example of an oligopoly? Barriers to entry. c) Affect costs and influence the supply of rival firms How oligopoly cause market failure? Explained by Sharing Culture ENGL1190_V0854_2023WI_Communications23.docx. b) legal The amount of time (in seconds) needed to complete a critical task on an assembly line was measured for a sample of 50 assemblies. D) unit elastic demand. Market players in an oligopolistic market focus on non-price competition, ensure their brands are uniquely identifiable and apply hidden advertising tactics. b) price leadership; collusion A) raise the price if marginal revenue increases B) lower the price if the new marginal cost curve lies below the break in the marginal revenue curve C) definitely lower the price D) not change the price E) raise the price if other firms raise their prices.

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