A monopoly occurs when. B) equilibrium price and quantity will be insensitive to small cost changes. B. 14) The kinked demand curve model It is the most important feature of an oligopolistic market. *Large capital investment While adopting the leaders price, if firm B supplies less amount than XB which needs to maintain the equilibrium price, the leader will push to a non-profit maximizing position. xxx\underline{\phantom{\text{xxx}}}xxx. Furthermore, no restrictions apply in such markets, and there is no direct competition. Furthermore, no restrictions apply in such markets, and there is no direct competition. C) changes in the output of any member firms will have no impact on the market price. 300 laborers were employed at the plant that month. That means higher the price, lower the demand. 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. A situation where firms meet to fix prices, divide markets, or restrict competition is called ______. 8) Firm X is competing in an oligopolistic industry. b) strengthens As a result, monopolists produce less, at a higher average cost, and charge a higher price than would a combination of firms in a perfectly competitive industry. 9) In the dominant firm model of oligopoly, the dominant firm faces a E) None of the above. 13) Complete the following sentence. c) Localized markets Let us consider the followingexamplesto understand the concept better: Samsung and Nokia are two big players in the Android smartphones industry, with the former trying to capture the market by keeping the price lenient. d) percentage of industries that are oligopolies, c) sales of the largest firms in an industry, Firms in oligopolistic industries are "price makers" because such firms ______. 13) A tit-for-tat strategy can be used d) The percentage of industries that are dominated by a group of four or fewer firms, c) The percentage of total industry sales accounted for by the four largest firms, What term means "cooperation with rivals?" B) in a single-play game but not a repeated game. A) Each firm faces a downward-sloping demand curve. Consequently, the output and pricing policies of a particular company can affect market conditions. Interdependence d) cheat, Which of the following represent shortcomings of the four-firm concentration ratio? So go ahead and leave a comment below. $15. The more concentrated a market is, the more likely it is to be oligopolistic. Meanwhile, all firms know that their decisions affect other firms sales and profit, hence they necessarily react against those decisions. c) high to receive a payout of $12 Which one of the following is the most important reason? Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. d) easier. E) other firms will not raise theirs. C) the good produced in the market has been deemed a necessity Even though the products of companies A and B are similar, there must be something that distinguishes them. 1) The market structure in which natural or legal barriers prevent the entry of new firms and a small number of firms compete is, 2) Suppose that industry A consists of four firms who collectively control 96 percent of total sales in the market. Segn Ricardo no es posible que exista equidad en el mercado debido a que: A. d) have interdependent pricing. B) raise the price of their products. ENGL1190_V0854_2023WI_Communications23.docx. *The game would eventually end in either cell B or cell C. The urban land lease policy is not very friendly to rural households land in general and the poor land holders in particular. 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? What are the 4 characteristics of oligopoly? O D. Some barriers to entry. Consequently, each firm must condition its behavior on the behavior of the other firms. Welcome to EconTips, your number one source for all things about economics. a) collusion; cartel d) The firms in the industry are interdependent. In a monopoly, only one big brand influences the entire market without any competition. d) Firms choose strategies at the same time. The policy implementation process has not taken in to account the life of rural peasants living in vicinity of cities. The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above. D) a firm in perfect competition. d. 2. . 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in b) it will lower the firm's costs B) is not; to comply when the other firm cheats and to cheat when the other firm complies Answers: 1 Show answers Another question on Social Studies. An oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. 0) If the efficient scale of production only allows three firms to supply a market, the market is a. D. El desempleo voluntario hace que no se produzca el crecimiento econmico. A dominant-bank oligopoly confronting a competitive fringe There are two sets of banks: dominant banks and fringe banks. The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. d) strategic theory. 1. E) none of the above. a) are monopolies So here we can see a one-way interdependence pattern. Each firm is so large that its actions affect market conditions. What is it called when firms reach a verbal or tacit agreement with rivals about price in a social setting like the golf course? *Preemptive pricing It is calculated by dividing the change in the costs by the change in quantity.read more is the cost of productionCost Of ProductionProduction Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. B) a market where two firms compete for profit and market share. 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. c) price leadership; cartel A small number of sellers. *To increase economies of scale, *To increase market share E) a market with two distinct products. *The firm's profits will be lower. B. El valor de cambio del bien se mide segn el trabajo que este tiene incorporado. A(n) _______ (Enter one word) is a market dominated by a few large producers of a homogeneous or differentiated product. D) neither is protected by high barriers to entry. It determines the law of demand i.e. Marginal revenue = Change in total revenue/Change in quantity sold. The demand curve will look kinked to reflect the fact that rivals will match price *decreases* but ignore price *increases*. *mutual interdependence B) perfectly inelastic demand. from chapter 12 ^-^, What is the only stable outcome in a payoff matrix? d) They do not achieve allocative efficiency because their price exceeds marginal cost. A) suggests that price will remain constant even with fluctuations in demand. B) unit elastic. 6) In the prisoners' dilemma with players Art and Bob, each prisoner would be best off if A) both prisoners confess. 6. Artificial intelligence (AI) services are on the rise, with every industry readying to integrate the technology sooner or later. While it is true that strategic behavior and mutual interdependence characterize oligopolies, this is not the reason why they are price makers. marginal cost pricing The joining of firms that are producing or selling a similar product is a horizontal merger Suppose an industry has total sales of $25 million per year. b) demand theory $3. 14) A duopoly occurs when ________. Oligopoly is one of the four market structures and identified by a small number of big businesses operating in a particular industry. 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. B) both prisoners deny. *It lowers search costs of information for consumers. The market share of the firms is unequal. 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 helps avoid the potential price war and price rigidity. And that is what turns out to be the unique selling proposition (USP) of the respective brands in the oligopolistic industry. B) the firms may legally form a cartel. Sweezy Oligopoly - based on a very specific assumption regarding how other firms will respond to price increases and price cuts. believes that DTRs debt to equity ratio of 1.6 is probably the minimum that lenders will accept. D) is; the smaller firms cannot become the dominant firm Have you a question about something that I covered. D. Th; Which of the following is a characteristic of an oligopoly market structure? as the price increases, demand decreases keeping all other things equal. 2) In the dominant firm model of oligopoly, the larger firm acts like The key characteristics of an oligopoly market structure include: Few firms : There are only a few firms in the market, which makes it easy for the firms to coordinate their behavior and to reach . A) Each firm faces a downward-sloping demand curve. For example, when a government grants a patent for an invention to one firm, it may create a monopoly. Because of their large size and minimal competition, each firm in an oligopoly market structure influences the others. True or false: Firms in an oligopoly always produce a homogeneous product. An oligopoly is an industry dominated by a few large firms (Few sellers supplying, many buyers). c) dominant firms c) Dominant firms A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating. what are the 5 characteristics of an oligopoly? What does a demand curve look like for an oligopolistic firm? When the negotiations began, DTR had debt of$80 million and equity of $50 million. It includes decisions made in concentrated markets, such as product prices, quality standards, and production planning. Demand Curve is a graphical representation of the relationship between the prices of goods and demand quantity and is usually inversely proportionate. But in practice, there are several barriers to entre which make it quite difficult for the new firms to join the industry or market. Two different industries can have the same the four-firm concentration ratio, yet the amount of monopoly power of each of the firms in the two industries can be drastically different. E) a cartel. That is, the large firm acts independently. Marilyn Experts are tested by Chegg as specialists in their subject area. The labor productivity at this plant is known to have been 0.100.100.10 vans per labor-hour during that month. A) costs, prices, profit, and strategies. *It helps reduce demand for material products. d) straight and steep B) Dr. Smith does not advertise no matter what Dr. Jones does. 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? C) firms in monopolistic competition. Collusion becomes more difficult as the number of firms ____. they set up a 1 meter (100 cm) track. To further understand market modules follow the below topics. c) is always downward sloping A study based on over 9,0009,0009,000 U. S. residents E) unknown. The need to spend a huge amount of money on name recognition and market reputation may discourage entry by new firms. C) the HHI for the industry is small. d. *Reduce uncertainty If so, then the firm's demand curve will be ______. Firms are more likely to cheat on a collusive agreement when the economy is experiencing a _____ (Enter one word). b) They try to avoid losses by raising prices in conjunction with rival firms. B) Other firms will enter the industry. (Enter one word for each blank. The presidents friend constructs and sells single family homes. c. Competing firms can enter the industry easily. e) through cartels, c) through product development Barriers to entry into an oligopoly most resemble those of a ______. It determines the law of demand i.e. The most important model of oligopoly is the Cournot model or the model of quantity competition. 0. 8) 8)Which is not a characteristic of oligopoly? The main Characteristics of oligopoly are as follows: A few sellers There will be a few sellers in an oligopoly. A) This game has no dominant strategies. *manipulating consumer preferences E) the firms are interdependent. b) Interindustry competition d) does not influence. Oligopolistic behavior implies that oligopolists prefer competition ______. *It eliminates competition among firms. Patent rights or accessibility to technology may exclude potential competitors. If the products of the firms are differentiated the degree of interdependence is then weakened. c) kinked e) It could be downward sloping or kinked. Libertyville has two optometrists, Dr. Smith and Dr. Jones. Oligopoly. And rest of the businesses or minor players follow the same. Which of the following is not a characteristic of oligopoly? Our model focuses on the interactions of these banks within an imperfectly competitive loan market and the endogenous determination of equilibrium loan quantities for banks within each group, the total equilibrium amount in . b) OPEC The factors that determine a market structure include the number of businesses, control over prices, and barriers to market entry. 8) A weakness of the kinked demand curve theory of oligopoly is that it does not . B) marginal cost curve is discontinuous. Which is the simple form of oligopoly market? E) potential entrants taking all the business away from existing firms. Their differences can range from. c) losses; prices; increase, What is it called when a group of producers creates a formal written agreement stating the level of output by each firm and the prices that must be charged? A) a Competition Tribunal. Perfect competition is a market in which there are a large number of buyers and sellers, all of whom initiate the buying and selling mechanism.