Consider a Cournot duopoly with the following inverse demand function: P = 10 - 0.5Q1 - 0.5Q2. The firms' marginal costs are identical and are given by MCi(Qi) = 3. Based on this information, firm 1 and 2's reaction functions are:

A) r1(Q2) = 7 - 0.5Q1 and r2(Q1) = 7 - 0.5Q2. B) r1(Q2) = 14 - 0.25Q2 and r1(Q2) = 14 - 0.25Q1. C) Q1 = 7 - 0.5Q2 and Q2 = 7 - 0.5Q1. D) Q1 = 14 - 0.25Q2 and Q2 = 14 - 0.25Q1. A) r1(Q2) = 7 - 0.5Q1 and r2(Q1) = 7 - 0.5Q2. B) r1(Q2) = 14 - 0.25Q2 and r1(Q2) = 14 - 0.25Q1. C) Q1 = 7 - 0.5Q2 and Q2 = 7 - 0.5Q1. D) Q1 = 14 - 0.25Q2 and Q2 = 14 - 0.25Q1.

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2(Q1 + Q2). If the Stackelberg leader's and follower's marginal costs are zero, the leader's marginal revenue is:

A) MR(QL, QF) = 125 - QL + 0.5QF. B) MR(QL) = 250 - 2QL. C) MR(QF) = 250 - 2QF. D) MR(QL, QF) = 125 - 0.5QL + QF. A) MR(QL, QF) = 125 - QL + 0.5QF. B) MR(QL) = 250 - 2QL. C) MR(QF) = 250 - 2QF. D) MR(QL, QF) = 125 - 0.5QL + QF.

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg follower's reaction function is:

A) QF = 24.5 - 0.25QL. B) QF = 49 - 0.25QF. C) QF = 24.5 - 0.5QL. D) QF = 24.5 - QL. A) QF = 24.5 - 0.25QL. B) QF = 49 - 0.25QF. C) QF = 24.5 - 0.5QL. D) QF = 24.5 - QL.

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg leader's reaction function is:

A) QL = 24.5 - 0.5QF. B) QL = 50 - 0.5QF. C) QL = 49 - 0.5QF. D) None of the answers is correct. A) QL = 24.5 - 0.5QF. B) QL = 50 - 0.5QF. C) QL = 49 - 0.5QF. D) None of the answers is correct.

Exam 9: Basic Oligopoly Models

Consider a Cournot duopoly with the following inverse demand function: P = 10 - 0.5Q₁ - 0.5Q₂. The firms' marginal costs are identical and are given by MC_i(Q_i) = 3. Based on this information, firm 1 and 2's reaction functions are:

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Question 21

Which of the following is true?

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Question 22

The Sweezy model of oligopoly reveals that:

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Question 23

You are the CEO of ClipIt, a paper clip manufacturer. Your company enjoys a patented technology that allows it to produce paper clips faster and at a lower cost than your only rival, FastenIt. Clipit uses this advantage to be the first to choose its profit-maximizing output level in the market. The inverse demand function for paper clips is P = 500 - 2Q, ClipIt's costs are C_C(Q_C) = 2Q_C, and FastenIt's costs are C_F(Q_F) = 4Q_F. a. What is ClipIt's profit-maximizing output level? FastenIt's? b. What is the market's equilibrium price? c. How much profit does each firm earn? d. Ignoring antitrust considerations, would it be profitable for your firm to merge with FastenIt? If not, explain why not; if so, put together an offer that would permit you to profitably complete the merger.

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Question 24

Both firms in a Cournot duopoly would experience lower profits if:

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Question 25

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2(Q₁ + Q₂). If the Stackelberg leader's and follower's marginal costs are zero, the leader's marginal revenue is:

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Question 26

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

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Question 27

You are the manager of a firm in a new industry. You have gotten the jump on the only other producer in the market. You know what your competitor's cost function is, and it knows yours. Your products, although different to experts, are indistinguishable to the average consumer. Your marketing research team has provided you with the following market demand curve: Q = 1,250 - .5P. Your cost function is C_A(Q_A) = 8Q_A. Your competitor's cost function is C_B(Q_B) = 6Q_B. Your diligent effort will allow you to decide how much of your product to provide and will allow you to place it on the market shortly before your competitor will be able to make its product available for sale. What output level will you choose, and what price will you charge? Explain.

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Question 28

An increase in firm 1's marginal cost will cause:

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Question 29

A duopoly in which both firms have a Lerner index of monopoly power equal to 0 is probably a:

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Question 30

A new firm enters a market which is initially serviced by a Bertrand duopoly charging a price of $20. What will the new price be should the three firms coexist after the entry?

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Question 31

The peak of the isoprofit curve has which of the following characteristics?

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Question 32

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i = 2. Based on this information, the Stackelberg follower's reaction function is:

(Multiple Choice)

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Question 33

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i = 2. Based on this information, the Stackelberg leader's reaction function is:

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Question 34

Two firms compete as a Stackelberg duopoly. The demand they face is P = 100 - 3Q. The cost function for each firm is C(Q) = 4Q. The outputs of the two firms are:

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Question 35

Ed just finished an empirical study of oligopoly. He found the following result: "In the examined industry, a firm's demand curve is such that other firms match price increases but do not match price reductions." What kind of oligopoly is the examined industry?

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Question 36

The market demand in a Bertrand duopoly is P = 10 - 3Q, and the marginal costs are $1. Fixed costs are zero for both firms. Which of the following statement(s) is/are true?

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Question 37

There are many different models of oligopoly because:

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Question 38

You are a potential entrant into a market that previously has had entry blocked by the government. Your market research has estimated that the inverse market demand curve for this industry is P = 22,500 - 75Q, where . You estimate that if you enter the market, your own cost function will be C_y(Q_y) = 15,300Q_y. The government has invited your firm to enter the industry, but it will require you to pay a one-time license fee of $100,000. You do not know the cost functions of the firms currently in the market; however, the price is now $16,000. Last year 87 units were sold by existing firms. Would you choose to enter this market? Explain.

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Question 39

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q₁ - 2Q₂. Each firm has a marginal cost of $50. Based on this information, we can conclude that equilibrium price in the different oligopoly models will follow which of the following orderings?

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Question 40

Showing 21 - 40 of 134

Consider a Cournot duopoly with the following inverse demand function: P = 10 - 0.5Q₁ - 0.5Q₂. The firms' marginal costs are identical and are given by MC_i(Q_i) = 3. Based on this information, firm 1 and 2's reaction functions are:

Which of the following is true?

The Sweezy model of oligopoly reveals that:

Both firms in a Cournot duopoly would experience lower profits if:

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2(Q₁ + Q₂). If the Stackelberg leader's and follower's marginal costs are zero, the leader's marginal revenue is:

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

An increase in firm 1's marginal cost will cause:

A duopoly in which both firms have a Lerner index of monopoly power equal to 0 is probably a:

A new firm enters a market which is initially serviced by a Bertrand duopoly charging a price of $20. What will the new price be should the three firms coexist after the entry?

The peak of the isoprofit curve has which of the following characteristics?

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i = 2. Based on this information, the Stackelberg follower's reaction function is:

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i = 2. Based on this information, the Stackelberg leader's reaction function is:

Two firms compete as a Stackelberg duopoly. The demand they face is P = 100 - 3Q. The cost function for each firm is C(Q) = 4Q. The outputs of the two firms are:

Ed just finished an empirical study of oligopoly. He found the following result: "In the examined industry, a firm's demand curve is such that other firms match price increases but do not match price reductions." What kind of oligopoly is the examined industry?

The market demand in a Bertrand duopoly is P = 10 - 3Q, and the marginal costs are $1. Fixed costs are zero for both firms. Which of the following statement(s) is/are true?

There are many different models of oligopoly because:

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q₁ - 2Q₂. Each firm has a marginal cost of $50. Based on this information, we can conclude that equilibrium price in the different oligopoly models will follow which of the following orderings?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

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Exam 9: Basic Oligopoly Models

Consider a Cournot duopoly with the following inverse demand function: P = 10 - 0.5Q1 - 0.5Q2. The firms' marginal costs are identical and are given by MCi(Qi) = 3. Based on this information, firm 1 and 2's reaction functions are:

Which of the following is true?

The Sweezy model of oligopoly reveals that:

Both firms in a Cournot duopoly would experience lower profits if:

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2(Q1 + Q2). If the Stackelberg leader's and follower's marginal costs are zero, the leader's marginal revenue is:

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

An increase in firm 1's marginal cost will cause:

A duopoly in which both firms have a Lerner index of monopoly power equal to 0 is probably a:

A new firm enters a market which is initially serviced by a Bertrand duopoly charging a price of $20. What will the new price be should the three firms coexist after the entry?

The peak of the isoprofit curve has which of the following characteristics?

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg follower's reaction function is:

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg leader's reaction function is:

Two firms compete as a Stackelberg duopoly. The demand they face is P = 100 - 3Q. The cost function for each firm is C(Q) = 4Q. The outputs of the two firms are:

Ed just finished an empirical study of oligopoly. He found the following result: "In the examined industry, a firm's demand curve is such that other firms match price increases but do not match price reductions." What kind of oligopoly is the examined industry?

The market demand in a Bertrand duopoly is P = 10 - 3Q, and the marginal costs are $1. Fixed costs are zero for both firms. Which of the following statement(s) is/are true?

There are many different models of oligopoly because:

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q1 - 2Q2. Each firm has a marginal cost of $50. Based on this information, we can conclude that equilibrium price in the different oligopoly models will follow which of the following orderings?

The Fundamentals of Managerial Economics

Market Forces: Demand and Supply

Quantitative Demand Analysis

The Theory of Individual Behavior

The Production Process and Costs

The Organization of the Firm

The Nature of Industry

Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

Game Theory: Inside Oligopoly

Pricing Strategies for Firms With Market Power

The Economics of Information

Advanced Topics in Business Strategy

A Managers Guide to Government in the Marketplace

Filters

Consider a Cournot duopoly with the following inverse demand function: P = 10 - 0.5Q₁ - 0.5Q₂. The firms' marginal costs are identical and are given by MC_i(Q_i) = 3. Based on this information, firm 1 and 2's reaction functions are:

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2(Q₁ + Q₂). If the Stackelberg leader's and follower's marginal costs are zero, the leader's marginal revenue is:

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i = 2. Based on this information, the Stackelberg follower's reaction function is:

Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q₁ - 2Q₂. The firms' marginal costs are identical and are given by MC_i = 2. Based on this information, the Stackelberg leader's reaction function is:

Consider a market consisting of two firms where the inverse demand curve is given by P = 500 - 2Q₁ - 2Q₂. Each firm has a marginal cost of $50. Based on this information, we can conclude that equilibrium price in the different oligopoly models will follow which of the following orderings?