Exam 12: Price and Output Determination Under Oligopoly

Assume that an oligopolist faces a kinked demand curve. Suppose that the marginal cost curve passes through the gap in the marginal revenue curve. Price and output will be determined

Recalling some historical detail of the chapter, the rapid growth of Boeing was primarily due to

A tit-for-tat strategy in a two-firm balanced oligopoly results in

According to the text, which of the following is a principal reason why firms merge?

According to the text, all of the following are reasons for firms to merge except

Which type of merger is most likely going to decrease competition in an industry?

When firms do not collude in a game-playing market environment, firms end up with low prices and high output levels.

All evidence points to the fact that firms' market power within an industry and industry concentration ratios are

One of the theories that explains oligopoly behavior is the kinked demand curve theory. The kinked demand curve

A firm's market share can be measured by

Consider the relationship between a kinked demand curve and the corresponding marginal revenue curve. Below the point where the kinked demand curve has its characteristic kink, the marginal revenue curve is

In 1996, All-Points Flashlights merged with North Star Flashlights to form a new company called Allstar Flashlights. In 1997, Allstar Flashlights merged with Bright Idea Lightbulbs to form a new company called Bright Star. Then, in 2000, Bright Star merged with Wendy's Kites & Stuff, a company that produces paper kites and other toys, to become BSK International. Describe the kinds of mergers that took place.

-In Exhibit L-5, the most reasonable explanation for what happens to profit when both airlines choose a low price is that

The percentage of U.S. industrial sales produced in industries with four-firm sales concentration ratios of 50 percent or more has remained pretty much unchanged from1895 through 1982.

When one firm assumes others in the market will follow its price setting behavior, this is referred to as

The type(s) of merger(s) that directly increase(s) concentration in an industry is (are)

Horizontal mergers are pretty rare in the United States due to antitrust laws.

A firm that has merged with many other firms producing a variety of goods unrelated to each other

Concerning the number of horizontal, vertical, and conglomerate mergers in the United States over the period 1890 to 1990, data show that

The formation of cartels is illegal in all countries of the world.