Exam 9: Basic Oligopoly Models

"Tom and Jack are the only two local gas stations.Although they have different constant marginal costs, they both survive continued competition." Tom and Jack do not constitute a:

Bertrand model of oligopoly reveals that

Over the past 20 years, the 12 members of the Organization of Petroleum and Exporting Countries have made repeated attempts to restrict output in order to maintain high crude oil prices.Between 1990 and 1995, however, crude oil prices have dropped by about 20 percent, due in part to increased production from the former Soviet Union, Latin America, Asia, and the North Sea.In light of these increases in oil production from non-OPEC countries, what must OPEC do to maintain the price of oil at its desired level? Do you think this will be easy for OPEC to do? Explain.

The market demand in a Bertrand duopoly is P = 15 - 4Q, and the marginal costs are $3.Fixed costs are zero for both firms.Which of the following statement(s) is/are true?

If firms compete in a Cournot fashion, then each firm views the