Exam 17: Oligopoly

If both firms in a duopoly increase their production by one unit beyond the monopoly output, each firm's profit ________ and the TOTAL profit of the duopoly ________.

The players in a game theory situation often do not act in their joint interest because of which of the following?

In the 1970s, when petrol price ceilings below the equilibrium price of petrol were imposed in America, some petrol stations required that buyers of petrol also purchase other products sold at the station. This policy is an example of which of the following?

A cartel is most likely to occur in

A cartel is a collusive agreement among a number of firms that is designed to

The above figure shows the market demand curve for long-distance land-based telephone calls. Suppose the marginal cost of a long-distance telephone call is 2 cents per minute for a call no matter how many minutes of calls are made and there are three firms in the industry. If the firms in the industry operate as perfect competitors, the price of a call is ________ per minute and if the firms in the industry operate as a monopoly, the price of a call is ________ per minute.

-The above figure shows the market demand curve for long-distance land-based telephone calls. Suppose the marginal cost of a long-distance telephone call is 2 cents per minute for a call no matter how many minutes of calls are made and there are three firms in the industry. If the firms in the industry operate as perfect competitors, there are ________ minutes of calls made per hour.

-The figure above shows a ________ where ________ firm(s) produce(s) ________.

When an oligopoly reduces its price with the intent of driving away its competitors, it is said to be engaging in

For a duopoly, the maximum TOTAL profit is reached when the duopoly produces

-Which of the following is true? In the above figure, if the market is

In the above figure, the output of an oligopoly will range between

The Shiny Watch company, a manufacturer of expensive watches, requires all of its retailers to sell its watches for a specific price. Which of the following statements are true? i. The Shiny Watch company is engaged in predatory pricing. Ii) The Shiny Watch company is definitely violating the law. Iii) The Shiny Watch company is engaged in resale price maintenance.

-The figure above shows that ________ occurs at ________ units and that ________ firms should share the market.

-One of the main tools economists use to analyse strategic behaviour is

-A Nash equilibrium occurs

If Polka Cola prevents all of its retail outlets from selling any other competing soft drink, it is engaged in

-Suppose Intel and AMD can each charge either $300 or $200 for a CPU (the computing unit of a computer). The above table illustrates the payoffs, in millions of dollars, from each of the four possible outcomes that could occur in their duopoly setting. If Intel charges $300 and AMD charges $300, then Intel's profit will be ________ million and AMD's profit will be ________ million.

Economists use game theory to analyse strategic behaviour, which takes into account

-The only two firms in a market are trying to decide what price to charge. The payoff matrix for this duopoly game is shown above. The payoffs are thousands of dollars of economic profit. In the above game, in the Nash equilibrium,