Exam 14: Oligopoly

_____ occurs when the only two firms in an industry agree to fix the price at a given level.

When a firm responds to a rival's cheating by cheating and to a rival's cooperation by cooperating,that firm is practicing a _____ strategy.

Use the following to answer question: -(Table: Demand for Crude Oil)Use Table: Demand for Crude Oil.Assume that the crude oil industry is a duopoly and the marginal cost and fixed cost of producing crude oil equal zero.Suppose that the two firms are maximizing industry profit and splitting the profit evenly.If both firms decide to cheat and produce 10 more barrels each,industry output will be _____ barrels.

Tacit collusion in an industry is limited by:

An industry that consists of two firms is:

Suppose there are 10 identical firms in an industry and each produces 10% of the total market sales.The HHI for this industry would indicate that the industry is:

Antitrust legislation was first passed in the United States in 1776.

The FIRST trust in the United States was established by _____ in the _____ industry.

Use the following to answer question: Figure: Pricing Strategy in Cable TV Market II -(Figure: Pricing Strategy in Cable TV Market II)Use Figure: Pricing Strategy in Cable TV Market II.If CableNorth followed a high-price strategy one period but found that CableSouth followed a noncooperative low-price strategy,and CableNorth decided to lower prices for the next month,we would say that CableNorth is following a:

Which statement is NOT true about OPEC?

A trust is a government agency that enforces laws limiting the power of oligopolies.

(Scenario: Payoff Matrix for Two Firms)Use Scenario: Payoff Matrix for Two Firms.Firm B has: Scenario: Payoff Matrix for Two Firms The following table provides the payoff matrix for two firms,firm A and firm B.They are the only two firms in the industry and can either compete or cooperate with each other,with the following profit results reflecting their actions.

Use the following to answer question: Figure: Pricing Strategy in Cable TV Market I -(Figure: Pricing Strategy in Cable TV Market I)Use Figure: Pricing Strategy in Cable TV Market I.If neither CableNorth nor CableSouth advertises,then without any collusion:

In the 1960s and 1970s,General Motors often set prices for the new model year and Ford and Chrysler would follow.This was a form of tacit collusion known as price leadership.

Which example is MOST likely to be observed when firms engage mainly in nonprice competition?

A strategy in which players cooperate initially but then mimic what the other players do is referred to as a:

Use the following to answer question: -(Table: Coke and Pepsi Advertising Game)Use Table: Coke and Pepsi Advertising Game.The soft-drink industry is dominated by Coca-Cola and Pepsi,and each firm spends a lot of money on advertising.Suppose each firm is considering a costly television commercial during halftime of the Super Bowl.The table shows the payoff matrix of profits that each firm would receive from their advertising decision,given the advertising decision of their rival.Profits in each cell of the payoff matrix are given as (Coke,Pepsi).If both firms expect to play this game repeatedly (every year for the foreseeable future)and they use a tit-for-tat strategy,in equilibrium,Coke _____ and Pepsi _____.

A strategy that is the same,regardless of the action of the other player in a game,is a _____ strategy.

Oligopolistic firms often choose not to compete on price.

In which situation does overt collusion take place?