Exam 14: Oligopoly

Caven and John have been arrested by the police,who have evidence that will convict them of robbing a bank.If convicted,each will receive a sentence of 6 years for the robbery.During questioning,the police suspect that Caven and John are responsible for a series of bank robberies.If both confess to the series,each will receive 12 years in jail.If only one confesses,he will receive 4 years and the one who does not confess will receive 14 years.What is the equilibrium for this game?

It is difficult to maintain a cartel for a long period of time.Which one of the following is the most important reason?

Use the table below to answer the following questions. Table 14.2.2 -Table 14.2.2 gives the payoff matrix in terms of economic profit for firms A and B when there are two strategies facing each firm: (1)charge a low price,or (2)charge a high price.If both firms could successfully collude,what would be firm A's economic profit?

Refer to the table below to answer the following questions. Table 14.2.10 -Refer to Table 14.2.10.Firm A and Firm B are the only producers of soap powder.They collude and agree to share the market equally.The equilibrium ________ a dominant strategy equilibrium because the strategy in this game is for a firm ________.

Use the table below to answer the following question. Table 14.3.1 -Consider the game shown in Table 14.3.1 based on potential gas prices between two competitors.The game is played repeatedly and the result is a cooperative equilibrium.The payoffs in the table show the economic profit of the firms.The most likely outcome is

Which one of the following characteristics applies to oligopolistic markets?

A merger is unlikely to be approved if

All of the following except ________ are noncriminal offences under the Competition Act.

In a cartel,the incentive to cheat is significant because

Prisoners' dilemma describes a case where

Canada's anti-combine law is enforced by

Refer to the table below to answer the following questions. Table 14.2.8 -Refer to Table 14.2.8.Libertyville has two optometrists,Dr.Smith and Dr.Jones.Each optometrist can choose to advertise his service or not.The incomes of each optometrist,in thousands of dollars,are given in the payoff matrix above.Which of the following statements correctly describes Dr.Smith's strategy given what Dr.Jones may do?

Consider the cartel of Trick and Gear.The game is repeated indefinitely and each firm employs a tit-for-tat strategy.The equilibrium is called

A dominant strategy equilibrium occurs when

Use the table below to answer the following questions. Table 14.2.2 -Table 14.2.2 gives the payoff matrix in terms of economic profit for firms A and B when there are two strategies facing each firm: (1)charge a low price,or (2)charge a high price.The equilibrium in this game (played once)is a dominant strategy equilibrium because

A trigger strategy is one in which a player

Refer to the table below to answer the following questions. Table 14.2.10 -Refer to Table 14.2.10.Firm A and Firm B are the only producers of soap powder.They collude and agree to share the market equally.The payoff matrix shows the game they play.The equilibrium of the game is that Firm A ________ and Firm B ________.

The act of parliament that provides our anti-combine law is

Use the information below to answer the following questions. Fact 14.2.1 Two firms,FastNet and SmartCast are the only Internet providers in a city.They have identical costs and one firm's service is a perfect substitute for the other firm's service.The industry is a natural duopoly.FastNet and SmartCast decide to collude and agree to share the market equally. -Refer to Fact 14.2.1.Which of the following actions maximizes the industry's economic profit?

In a duopoly game,we observe the following payouts.If the two firms collude they each make an economic profit of $50,000.If one firm cheats,then that firm makes an economic profit of $60,000 and the other incurs an economics loss of $10,000.If both firms cheat,then they both make zero economic profit.What is the Nash equilibrium?