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47) Firms in an oligopoly i. are independent of each other's actions. ii. can each influence...
Which of the following is an oligopoly model where firms assume that their rivals will hold...
Which of the following is an oligopoly model where firms assume that their rivals will hold their rates of production constant? A) The kinked demand curve model B) The Cournot Model C) The Bertrand model D) The price leadership model
The Key feature of Oligopoly is interdependence – we saw this in both traditional models and...
The Key feature of Oligopoly is interdependence – we saw this in both traditional models and using game theory. a. Explain why price can be very rigid for an oligopoly using the “Kinked Demand Model”: 2 point b. Explain how an oligopoly can simultaneously take one features seen for a monopoly and for perfect competition using the “Price Leader Model”: 2 point c. Describe how the Hirchmann Herfindahl Index (HHI) provides a more acquire measurement of market concentration than a...
In many oligopolistic industries, the same firms compete over a long period of time, setting prices and observing each...
In many oligopolistic industries, the same firms compete over a long period of time, setting prices and observing each other's behavior repeatedly. Given the large number of repetitions, why don't collusive outcomes typically result? Collusive outcomes are difficult to sustain in repeated games because O A. demand conditions often are static. O B. players often doubt that their opponents are perfectly rational. O C. successful collusion encourages entry O D. such games often continue indefinitely without end O E. players...
PRACTICE PROBLEMS FOR WEEK 6 Question: [Collusion when firms compete over time] Suppose two firms producing...
PRACTICE PROBLEMS FOR WEEK 6 Question: [Collusion when firms compete over time] Suppose two firms producing differentiated goods compete every day through prices. The demand for the good produced by firm i E {1,2} is qi = 24 – 5pi + 2p;. Firms can produce the goods with a constant marginal cost of production of O per unit. Hence, firm i's profit is given by T(Pi, p;) = (pi – 0) (24 – 5p; + 2p;). (a) What are firm...
An industry consists of two firms with identical demand function ? = 100 − ??, where...
An industry consists of two firms with identical demand function ? = 100 − ??, where ?? = ?1 + ?2. Both firms have identical cost ?? = 40??, where ? = 1,2. Both firms pay attention to the behaviour of their competitor in determining the output produced, and both firms make their decision simultaneously (no one moves first). (a) If both firms decide to compete in determining their outputs, find the profit maximizing q and P and calculate the...
4) The theory of oligopoly suggests that A) oligopoly may be the best of the feasible...
4) The theory of oligopoly suggests that A) oligopoly may be the best of the feasible alternative market structures when major scale economies exist. B) entry into the industry is an important force preventing the exploitation of market power by existing firms. C) innovation is weak when there is no price competition D) game theory is interesting theory but not useful for real corporate managers. E) the tendency toward joint maximization of profits is greater for a large number of...
Chapter 14 Vocabulary Name: a. Kinked demand curve b. Cartel c. Price leadership d. Game theory...
Chapter 14 Vocabulary Name: a. Kinked demand curve b. Cartel c. Price leadership d. Game theory e. Collusion f. Strategic behavior g. Homogeneous oligopoly h. Price war i. Differentiated oligopoly j. Oligopoly ( ) Five or fewer firms produce most of the output in an industry, or control a large share of the market. ( ) Many consumer goods, like automobiles and sporting goods, are produced by a few firms. ( ) This is when firm’s break from pricing decision...
48) 48) A merger between firms that are in the same industry is called a A) vertical merger C) ho...
48) 48) A merger between firms that are in the same industry is called a A) vertical merger C) horizontal merger. B) conglomerate merger D) none of the above. 49) 49) In oligopoly, any action by one firm to change price, output, or quality causes A) no reaction from the other firms. B) a reaction by other firms. C) loss of market share by the acting firm D) a profit gain for the other firms. 50) 50) The industry concentration...
Which of the following are true? I) Firms have long-run target dividend payout ratios. II) Dividend...
Which of the following are true? I) Firms have long-run target dividend payout ratios. II) Dividend changes follow shifts in long-term, sustainable earnings. III) Managers are reluctant to make dividend changes that might have to be reversed. Select one: a. I only b. II only c. III only d. I, II and III e. None of the above
47. Which of the following are assumptions for the ANOVA procedure? (I) Independent subjects (II) Sample...
47. Which of the following are assumptions for the ANOVA procedure? (I) Independent subjects (II) Sample size greater than 30 (III) Equal variances (IV) Normality : * (A) I, II, and III only (B) II and III only (C) II, III, and IV only (D) I, II, III, and IV (E) I, III, and IV only Questions 48-50: You are conducting a randomized block design, testing a new type of medicine that’s supposed to lower cholesterol, with the following partial...
In many oligopolistic industries, the same firms compete over a long period of time, setting prices and observing each other's behavior repeatedly. Given the large number of repetitions, why don't collusive outcomes typically result? Collusive outcomes are difficult to sustain in repeated games because O A. demand conditions often are static. O B. players often doubt that their opponents are perfectly rational. O C. successful collusion encourages entry O D. such games often continue indefinitely without end O E. players...
PRACTICE PROBLEMS FOR WEEK 6 Question: [Collusion when firms compete over time] Suppose two firms producing differentiated goods compete every day through prices. The demand for the good produced by firm i E {1,2} is qi = 24 – 5pi + 2p;. Firms can produce the goods with a constant marginal cost of production of O per unit. Hence, firm i's profit is given by T(Pi, p;) = (pi – 0) (24 – 5p; + 2p;). (a) What are firm...
4) The theory of oligopoly suggests that A) oligopoly may be the best of the feasible alternative market structures when major scale economies exist. B) entry into the industry is an important force preventing the exploitation of market power by existing firms. C) innovation is weak when there is no price competition D) game theory is interesting theory but not useful for real corporate managers. E) the tendency toward joint maximization of profits is greater for a large number of...
48) 48) A merger between firms that are in the same industry is called a A) vertical merger C) horizontal merger. B) conglomerate merger D) none of the above. 49) 49) In oligopoly, any action by one firm to change price, output, or quality causes A) no reaction from the other firms. B) a reaction by other firms. C) loss of market share by the acting firm D) a profit gain for the other firms. 50) 50) The industry concentration...
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