Exam 19: The World of Oligopoly: Preliminaries to Successful Entry

A model in which one firm chooses its quantity first, and then the other firm, knowing what firm 1 has done, makes its choice is called the

A duopoly is an industry in which there are two firms selling a product.

The change that a firm expects in its competitor's choice of an output level in response to a change the firm makes in its price is called conjectural variation.

An oligopoly is a market that is dominated by

Which of the following does not derive from an assumption that opponents will not respond to any action that a firm takes?

Describe the difference between a Cournot model and a Bertrand model.

A duopoly game in which firms alternate in setting quantities is called a

A model in which firm 1 and firm 2 choose a quantity simultaneously and, after both firms have chosen their outputs, the price of the good on the market and the profits of both firms are determined is called a

In the Stackelberg model, the Stackelberg follower moves

The Stackelberg equilibrium is defined by the equilibrium prices and quantities of a Stackelberg game.

As a government official responsible for commerce, would you prefer to see a market reach the monopolistic, perfectly competitive, or Cournot equilibrium?

A model that assumes that the firms are capacity-constrained is the

The strategic interaction between firms in a duopolistic market as a game where each firm chooses its quantity simultaneously is called a simultaneous-move quantity-setting duopoly game.

A Cournot equilibrium occurs where the reaction functions for the two firms

At a Bertrand equilibrium, the price of the product is driven down to

A duopoly in which the two firms collude on a price to set is called a

Collusive arrangements are more viable if the competition is like a game that is played

Which welfare outcome falls between the other two?

Once firms in a collusive duopoly start cheating on the agreed-upon price, the cheating usually continues until the price is