Exam 12: Price and Output Determination Under Oligopoly

The text refers to OPEC as a classic example of a cartel. OPEC is a group of countries that collude to control prices and output in the _______ industry(ies).

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Question 1

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Which would concern you most, a 5 percent increase in concentration in a market where the four-firm concentration ratio is 3 percent, 42 percent or 85 percent? Explain your reasoning.

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Question 2

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Generally, an increase in concentration leads to a bigger increase in price for firms in the mid-range of concentration ratios. This is why an increase in concentration in a market where the four-firm concentration ratio is 42 percent is the most worrisome.

Why do firms practice price discrimination?

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Question 3

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A firm will increase profit if it is able to charge each customer the highest price they are willing and able to pay. When a firm practices price discrimination, it segments its market in order to capture as much of the difference between the price that each customer is willing to pay and the price that they actually pay.

Conglomerate mergers increase concentration in an industry.

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Question 4

Which of the following items most likely explains why corn is not produced by a cartel?

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Question 5

When the profit-maximizing output level for a firm can be decided by setting output at the level where price is equal to marginal cost, the market structure is

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Question 6

Which of the following is not a reason why firms merge?

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Question 7

Cartel models are most like

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Question 8

Suppose there are 100 firms in an industry. If the leading firm has a 50 percent market share, the second largest firm has a market share of half the leader's, the third has a market share of half the second's, and the fourth largest has a market share of half the third's, what is the four-firm concentration ratio?

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Question 9

Which of the following countries' economic development began with government encouragement of cartel formation?

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Question 10

A good example of _______ is the merger between a steel firm and an ice cream firm.

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Question 11

The long-term trend in the United States is for markets to become more oligopolistic over time.

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Question 12

The formation of cartels in the U.S. is illegal.

(True/False)

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Question 13

The only item which would be consistent with a decreased likelihood of cartel formation for production of a product is

(Multiple Choice)

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Question 14

A group of firms that colludes to limit competition by assigning production quotas and setting a uniform price for all is called a(n)

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Question 15

If both airlines are aware of the information in Exhibit L-5 and act accordingly, then their behavior reflects all of the following except

(Multiple Choice)

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Question 16

Carson Bell and Renee Dohr own the only two firms in the United States that sell a unique herbal vitaminsupplement that has no close substitutes. They plan a secret meeting at the National Zoo in Washington,DC, to form a cartel in order to increase their profit. -How do they determine the price of their good?

(Short Answer)

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Question 17

The quickest way for aggressive oligopolists to expand production capacity and market power is to

(Multiple Choice)

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Question 18

Horizontal mergers would most likely cause the

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Question 19

-In Exhibit L-3, representing the demand curves that make up the kinked demand curve, D₁ is the

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Question 20

Showing 1 - 20 of 193

The text refers to OPEC as a classic example of a cartel. OPEC is a group of countries that collude to control prices and output in the _______ industry(ies).

Which would concern you most, a 5 percent increase in concentration in a market where the four-firm concentration ratio is 3 percent, 42 percent or 85 percent? Explain your reasoning.

Why do firms practice price discrimination?

Conglomerate mergers increase concentration in an industry.

Which of the following items most likely explains why corn is not produced by a cartel?

When the profit-maximizing output level for a firm can be decided by setting output at the level where price is equal to marginal cost, the market structure is

Which of the following is not a reason why firms merge?

Cartel models are most like

Which of the following countries' economic development began with government encouragement of cartel formation?

A good example of _______ is the merger between a steel firm and an ice cream firm.

The long-term trend in the United States is for markets to become more oligopolistic over time.

The formation of cartels in the U.S. is illegal.

The only item which would be consistent with a decreased likelihood of cartel formation for production of a product is

A group of firms that colludes to limit competition by assigning production quotas and setting a uniform price for all is called a(n)

If both airlines are aware of the information in Exhibit L-5 and act accordingly, then their behavior reflects all of the following except

The quickest way for aggressive oligopolists to expand production capacity and market power is to

Horizontal mergers would most likely cause the

-In Exhibit L-3, representing the demand curves that make up the kinked demand curve, D₁ is the

Introduction

Production Possibilities and Opportunity Costs

Demand and Supply

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters

Exam 12: Price and Output Determination Under Oligopoly

The text refers to OPEC as a classic example of a cartel. OPEC is a group of countries that collude to control prices and output in the _______ industry(ies).

Which would concern you most, a 5 percent increase in concentration in a market where the four-firm concentration ratio is 3 percent, 42 percent or 85 percent? Explain your reasoning.

Why do firms practice price discrimination?

Conglomerate mergers increase concentration in an industry.

Which of the following items most likely explains why corn is not produced by a cartel?

When the profit-maximizing output level for a firm can be decided by setting output at the level where price is equal to marginal cost, the market structure is

Which of the following is not a reason why firms merge?

Cartel models are most like

Which of the following countries' economic development began with government encouragement of cartel formation?

A good example of _______ is the merger between a steel firm and an ice cream firm.

The long-term trend in the United States is for markets to become more oligopolistic over time.

The formation of cartels in the U.S. is illegal.

The only item which would be consistent with a decreased likelihood of cartel formation for production of a product is

A group of firms that colludes to limit competition by assigning production quotas and setting a uniform price for all is called a(n)

If both airlines are aware of the information in Exhibit L-5 and act accordingly, then their behavior reflects all of the following except

The quickest way for aggressive oligopolists to expand production capacity and market power is to

Horizontal mergers would most likely cause the

-In Exhibit L-3, representing the demand curves that make up the kinked demand curve, D1 is the

Introduction

Production Possibilities and Opportunity Costs

Demand and Supply

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

The Economic Problems of Less-Developed Economies

Filters

-In Exhibit L-3, representing the demand curves that make up the kinked demand curve, D₁ is the