Exam 16: Oligopoly Games and Strategy

In the oligopoly price- fixing game, the payoffs are the

A contestable market necessarily occurs when

A duopoly occurs when _______.

The simplest prisoners' dilemma is a game that, in part, requires

One difference between oligopoly and monopolistic competition is that

When producers agree to restrict output, raise the price, and increase profits, the agreement is called _______.

A cartel usually has a collusive agreement to

Ann and Lynn 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 Ann and Lynn 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, she will receive 4 years and the one who does not confess will receive 14 years. What is the Nash equilibrium for this game?

Sarah's Soothing Nappies, Inc. and Orville's Odourless Nappies, Inc. are duopolists who have agreed to collude. Orville has decided that he will comply with the collusive agreement as long as Sarah cooperated in the previous period. But if Sarah cheated in the previous period, Orville will punish Sarah by cheating in the current period. Orville's strategy is referred to as a

A strategy of setting price below the monopoly profit- maximising price but at the highest level that will still result in a loss for a potential entrant into the market is known as

Which of the following is true regarding a collusive agreement? I. It is illegal in Australia. II. Two or more producers agree to restrict output or raise prices. III. Firms' profits are never maximised under this sort of agreement.

The prisoners' dilemma has a Nash equilibrium in which

The price in a contestable market is similar to that in a perfectly competitive market because

A market in which firms can enter and leave so easily that firms in the market face competition from potential entrants is called a

Limit pricing in a contestable market sets the price at the highest level that .

Big W -Big W and Kmart must decide whether to lower their prices, based on the economic profits shown in the table above. Which of the following is true?

Suppose two firms, FastNet and SmartCast are the only fast Internet providers in a city. They have identical costs and one firm's service is a perfect substitute for the other's. The industry is a natural duopoly. Suppose that FastNet and SmartCast collude and agree to share the market equally. In this scenario, which of the following actions will maximise the industry's economic profit?

In an oligopoly with a collusive agreement, the total industry profits will be smallest when

A market structure in which a small number of producers compete against each other is

In a contestable market,