b) Firms may sell a homogeneous product. a) kinked and steep 1) A cartel is a group of firms which agree to A) behave competitively. Monopolistic Competition and Economic Efficiency, Monopolistic Competition Equilibrium| Long-run, Short-run, What is Inflation Mean | Definitions, Types, Causes, How to Calculate the GDP [Definition & Formula], Main Theories of Inflation (With Diagram), Indifference Curve Q&A [Download Indifference Curve Pdf]. Oligopolistic behavior implies that oligopolists prefer competition ______. a) The number of average-sized firms in an industry needed to produce sales equivalent to the four largest firms It is calculated by dividing the change in the costs by the change in quantity.read more is the cost of productionCost Of ProductionProduction Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. E) cheat on each other. 2003-2023 Chegg Inc. All rights reserved. It is the most important feature of an oligopolistic market. The value denotesthe marginalrevenue gained. E) the firms are interdependent. Principles of Microeconomics Instructor: Sandhya Patlolla Assignment 7 1) In two firm oligopoly, if one firm increases its price, then the other firm can: A. E) specify what happens if costs change. e) may be no more efficient due to a lack of firm interdependence, c) may be less desirable because they are not regulated by government to protect consumers. The key characteristics of an oligopoly market structure include: Few firms : There are only a few firms in the market, which makes it easy for the firms to coordinate their behavior and to reach . The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. A market is deemed oligopolistic or extremely concentrated when it is shared between a few common companies. D)There is more than one firm in the industry. a) is needed in *To increase economies of scale, *To increase market share Oligopolists do not stress competing with each other on the pricing front. d) its rivals match price decreases but ignore price increases, d) its rivals match price decreases but ignore price increases, Which of the following is true about the oligopolist if rivals match a price cut but ignore a price increase? Compared to pure monopolies, oligopolies ______. b) greater than or equal to 50% a) Import competition A) zero economic profits in the long-run. A) average total cost curve is discontinuous. What kind of game is it if the firms must choose their pricing strategies at the same time? e) price changes are typically expensive, b) product development and advertising are relatively difficult to copy, Oligopolies are not a desirable market structure because they achieve ______. B. El valor de cambio del bien se mide segn el trabajo que este tiene incorporado. b) demand theory b) interindustry competition Oligopoly is an important form of imperfect competition. C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." B) marginal cost curve is discontinuous. D) a prisoner has no incentive to confess to his crime, and stands a greater chance of not going to prison. It is used as one of the strategies to increase the business firm's revenue and increase the market share. A) a firm in an oligopoly market. Based on the figure, if one firm cheats on the collusive agreement it can increase its payoff by If the products of the firms are homogeneous then the interdependence will tend to be strong because of the perfect substitutability of the products of the firms. c) give the appearance of increased competition B) the courts. D) entry into the industry of rival firms will have no impact on the profit of the cartel. 6) Which one of the following characteristics applies to oligopolistic markets? E) more elastic than the demand just above the price at the kink. It also means that each firm must be aware of the reaction of others to their actions. Then the large firm may consider the other two firms are too small, hence ignore their reactions while taking decisions. E) marginal cost. c) Kinked-supply curve model True or false: Firms in an oligopoly always produce a homogeneous product. $3. *To increase economies of scale. b) competitively Businesses in such a market collaborate to dominate the rest of the players and maximize joint revenue. d) lowering the cost of production b) Mutual interdependence E) 10,000. What is oligopoly and its characteristics? *interindustry competition 15 Oligopoly Advantages and Disadvantages - ConnectUS Eco Finals - Lesson 1 | PDF | Monopoly | Oligopoly a) There are a few large firms that make up the industry. C) Firms in the cartel will want to raise the price. 16) The firms Trick and Gear form a cartel to collude to maximize profit. Which of the following is characteristic of oligopoly, but not of monopolistic competition? attempts to raise $425 million to use to build apartments in a growing area of Tulsa. *Large capital investment If a firm assumes that its rivals will match all price changes, but the firm's rivals actually charge a lower price what are the potential consequences? C) Parliament. C) Art denies and Bob confesses. CFA And Chartered Financial Analyst Are Registered Trademarks Owned By CFA Institute. D) is; the smaller firms cannot become the dominant firm For example, an industry with a five-firm concentration ratio of greater than 50% is considered an oligopoly. ENGL1190_V0854_2023WI_Communications23.docx. Have you a question about something that I covered. The market share of the firms is unequal. a) major firms in an industry ranked by employment Each firm has a substantial share of the market supply. ), Which of the following is true about the oligopolist if rivals match a price cut but ignore a price increase? 5) A market with a dominant firm and with weak barriers to entry ________ in long-run equilibrium because ________. Four characteristics of an oligopoly industry are: Few sellers. d) They do not achieve allocative efficiency because their price exceeds marginal cost. B) "Every time Sparrow's Donuts has a donut sale, so does Tim Horton's." The characteristics of an oligopoly market or oligopolistic strategy are mentioned below: Interdependence . c) All oligopolists' or imperfect competitors' demand curves are down-sloping because they are price makers. The other two share the rest (20%). D) the industry is government regulated Keep its price constant and thus decrease its market share C. Increase its price and thus increase its market share D. Decrease its price and thus decrease its market share The firms produce differentiated products. These firms are large enough that their quantity influences the price and so impacts their rivals. . B)Firms set prices. D. Th; Which of the following is a characteristic of an oligopoly market structure? A Which of the following is not a characteristic of oligopoly? b) strengthens . D) There is more than one firm in the industry. What are the 4 characteristics of oligopoly? c) The supply curve model d) easier. What is the characteristics of oligopoly? E) an outcome. It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. *price elasticity of demand Since there are few dominating firms which are having full knowledge about the market, the decisions on the price and output of a firm depend on the reactions of other firms. c) They achieve allocative efficiency because they produce at minimum average total cost. D) monopolistic competition. How oligopoly cause market failure? Explained by Sharing Culture A) "I am producing extra widgets, even though it costs me short-run profits, to stop Wally's Widgets from expanding into my market." Oligopoly: Definition, Characteristics & Examples | StudySmarter So when an oligopolist decreases prices to increase output, others follow the path. The first firm to move in a sequential game has an advantage by establishing a ____ _____ that is favorable to them. C) a perfectly competitive market. A(n) _______ (Enter one word) is a market dominated by a few large producers of a homogeneous or differentiated product. You are free to use this image on your website, templates, etc., Please provide us with an attribution linkHow to Provide Attribution?Article Link to be HyperlinkedFor eg:Source: Oligopoly (wallstreetmojo.com). Oligopoly is said to prevail when there are few firms or sellers in the market producing or selling a product. *Increase profits Determinants of Price Elasticity of Supply. B) unit elastic. Pure because the only source of market power is lack of competition. Why is collusion desirable to oligopolistic firms? The Oligopoly Market: Example, Types and Features | Micro Economics A) a market where three dominant firms collude to decide the profit-maximizing price. c) through collusion However, firm B follows the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. b) The number of employees in an industry who ever have or are currently working for one of the four largest firms a) prices; uncertainty; increase B) a contestable market. A) there are fewer than 6 firms in a market Types of Market Structure Economists group industries into four distinct market structures: 1. C) specify how marginal cost is determined. b) There are barriers to entry into the market. b) u-shaped When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. Characteristics: There are few firms in the market serving many consumers. Macroprudential regulatory policies with a dominant-bank oligopoly and What is Oligopoly: Types, Characteristics and Examples Why does a rise in the current asset to total asset ratio result in a decline in net working capital's estimate of both profits and risk? C) assumes that marginal revenue equals marginal cost only at the quantity at the "kink." C) perfectly elastic demand. Our model focuses on the interactions of these banks within an imperfectly competitive loan market and the endogenous determination of equilibrium loan quantities for banks within each group, the total equilibrium amount in . Save my name, email, and website in this browser for the next time I comment. b) flexible *dominant firms Oligopoly characteristics include high barriers to new entry, price-setting ability, the interdependence of firms, maximized revenues, product differentiation, and non-price competition. Despite having the same market share, a smaller number of firms causes oligopolists to get influenced by each others decisions, such as price cuts and increases. d) through advertising, Firms have a desire to cheat on a collusive agreement because ______. *It enhances competition and reduces monopoly power. b) legal Cost of firm A is lower than firm B Profit maximizing price and quantity of firm A is PA and XA respectively. C) there are numerous producers of two goods competing in a competitive market Consequently, the sales of the other firm will be definitely reduced by the same percentage. 11) Which one of the following quotations best describes a dominant firm oligopoly? Answer: An oligopoly is an industry which is dominated by a few firms. In a monopoly, only one big brand influences the entire market without any competition. c) The outcomes for all firms are positive. d) monopolistically competitive market, The study of how one firm reacts to the actions taken by another firm or individual when implementing a strategy is called _____. We unlock the potential of millions of people worldwide. $6. at least $10 million. Click the card to flip Definition 1 / 84 Suppose that one of the two firms decided to reduce the price of its product by some amount resulting 20 % increase in its sales. c) less than or equal to 40% Either way, Id like to hear from you. as the price increases, demand decreases keeping all other things equal.read more shifts. a) purely competitive market C) if Jane does not change her decision, Bob would like to change his. Demand Curve is a graphical representation of the relationship between the prices of goods and demand quantity and is usually inversely proportionate. c) Affect costs and influence the supply of rival firms *Patents, *Preemptive pricing Land Rights and Expropriation in Ethiopia - academia.edu b) upward-sloping *Cause price wars during business recessions The existence of oligopoly requires that a few firms are able to gain significant market power, preventing other, smaller competitors from entering the market. D) specify how average cost is determined. D) the four-firm concentration ratio for the industry is small. EconTips 2022 - All Right Reserved, Designed and Developed by Harshasoft, Perfect Competition: Definition, Graphs, short run, long run, Monopoly Price discrimination: Types, Degrees, Graphs, Examples, Monopolistic Competition Equilibrium| Long-run| Short-run. The control of oligopolists over specialized inputs, such as resources, price, and production, makes it difficult for a new firm to survive. An oligopoly is an industry dominated by a few large firms (Few sellers supplying, many buyers). The financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. *It lowers search costs of information for consumers. 41) Refer to Table 15.3.12. D) A and B. We can conclude that industry A is. This is different compared to the perfectly competitive market and the monopolistic market that consist of a large number of sellers whereas there is only one sole seller in the monopoly market. A) collusion of the participants leads to the best solution from their point of view. O D. Some barriers to entry. Marginal revenue = Change in total revenue/Change in quantity sold. D) firms in perfect competition. Strategic independence. A. C) 2. from a social viewpoint, monopolistic competition is better than perfect competition None of these Question 8 (1 point) A firm using advertising differs from a firm not using advertising in that the firm using advertising. b) through pricing D) increase the amount they produce. B) it prevents or substantially lessens competition *It lowers search costs of information for consumers. Oligopoly is a market structure characterized by a few firms. d) Affect costs and influence the products of rival firms, a) Affect profits and influence the profits of rival firms, Which of the following is a model used to examine oligopolistic pricing? c) is always downward sloping Furthermore, no restrictions apply in such markets, and there is no direct competition. In doing so, they reduce production and increase prices, a phenomenon called collusion. issued for the land? B) a market where two firms compete for profit and market share. a) its rivals do not respond to either a price cut or price increase D) not an oligopoly. The characteristics of oligopoly include interdependence, product differentiation, high barriers to entry, uncertainty, price setters. a) Its demand curve is downward-sloping d) The same as a monopoly, By controlling ______ through collusion, oligopolists may be able to reduce ______, ______ profits and block the entry of new rivals. A) "Gas prices in this town always go up and down together." Top 9 Characteristics of Oligopoly Market - Economics Discussion C) in a repeated game but not a single-play game. A) each firm can act like a monopoly. 36) Refer to Table 15.3.10. b) depends on the firm's cost structure E) None of the above. O B. Wal-Mart's marginal cost of a flat panel TV has fallen, and as a result Wal-Mart will ________. D) Dr. Smith advertises only if Dr. Jones advertises. *interindustry competition A. cutting prices It thus limits the competition to only those already in the group. The distinctive feature of an oligopoly is interdependence. *providing misleading information e) through cartels, c) through product development Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. Oligopoly refers to a market situation or a type of market organisational in which a few firms control the supply of a commodity. A) the government will impose price controls. *The firm's demand curve will shift further to the left. Which of the following is not a characteristic of oligopoly? a. the Without collusion, if a firm incorrectly assumes that its rivals will charge the same price but its rivals actually charge a lower price, the firm's demand curve will shift to the ____. A Computer Science portal for geeks. (Enter one word per blank. c) high to receive a payout of $12 Which of the following are characteristics of oligopolistic markets? *mutual interdependence d) Firms choose strategies at the same time. If so, then the firm's demand curve will be ______. they will make more pricing low than if they both price high. You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. B) the firms may legally form a cartel. Firm A and Firm B are the only producers of soap powder. 13) Complete the following sentence. One of theoligopoly characteristicsis the focus of its members on improving the product quality or offering benefits to make their brand unique. b) its rivals match a price cut but ignore a price increase . a) are less efficient due to competition Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. Final Exam Study - Oligopoly And Game Theory ECON An oligopolistic market exhibits the followingoligopoly features: It raises barriers for new entrants to enter into the respective sector. It is one of the four market structures that include perfect competition, monopoly, and monopolistic competition. Ficha de una obra (2).docx - Ficha de una obra Autor: a) Cartel d) elastic, An oligopoly firm's demand curve will be kinked if ______. a) low to receive a payout of $15 Marginal costMarginal CostMarginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. a) The possibility of price wars diminishes and profits are maximized. *To increase control over the product's price c) dominant firms Production Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. E) both are price takers. Microeconomics II-Module - Microeconomics II Monopolistic competition 8 8 which is not a characteristic of oligopoly a each - Course Hero Pure (Perfect) Competition 2. a. Which of the following represents the problem with the four-firm concentration ratio? 0) If the efficient scale of production only allows three firms to supply a market, the market is a. D) patents, copyrights, barriers to entry, and rules. d) their profits and sales will rise D) neither is protected by high barriers to entry. Oligopolies are typically composed of a few large firms. D. 2021. *Prohibit the entry of new rivals. A) raise the price if marginal revenue increases B) lower the price if the new marginal cost curve lies below the break in the marginal revenue curve C) definitely lower the price D) not change the price E) raise the price if other firms raise their prices. It is assumed that all of the sellers sellidentical or homogenous products.read more, monopoly, and monopolistic competition. c) allocative efficiency but not productive efficiency c) Blue jean designer *It helps reduce demand for material products. ADVERTISEMENTS: This fact is recognized by all the firms in an oligopolistic industry. 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in Use the figure below to answer the following question. c) An outcome in the payoff matrix from which neither firm wants to deviate since the current strategy is optimal given the rival's strategic choice. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. *Reduce uncertainty An oligopoly is a market state where there is a limited amount of competition available for consumers to consider. *Ownership and control of raw materials c) its rivals match a price increase but ignore a price cut That means higher the price, lower the demand. . An oligopoly in economics refers to a market structure comprising multiple big companies that dominate a particular sector through restrictive trade practices, such as collusion and market sharing. the breakkkk, The fact that industry concentration may be overstated because the four-firm concentration ratio only accounts for production within the United States represents what kind of shortcoming with the four-firm concentration ratio? B) the firms may legally form a cartel. Oligopolyis a market structure On the other hand, if an oligopolist reduces output by raising prices, the rest refrain from doing so. In this market, there are a few firms which sell homogeneous or differentiated products. The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. While AI integration in the medical, legal, and financial sectorsFinancial SectorsThe financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. It encompasses several industries, including banking and investment, consumer finance, mortgage, money markets, real estate, insurance, retail, etc.read more is in progress, the automobile industry has already introduced AI-powered self-driving cars. B) revenues, elasticity, profit, and payoffs. E)Firms are profit -maximizers. A) kinked demand curve. d) Interindustry competition, Which are barriers to entry in both monopolies and oligopolies? a) price leadership The distinctive feature of an oligopoly is interdependence. Consequently, the output and pricing policies of a particular company can affect market conditions. what are the 5 characteristics of an oligopoly? a) The kinked-demand curve model Marilyn is also aware that DTR issued$10 million of common stock to a long-time friend of the 16) A monopolistically competitive firm is like an oligopolistic firm insofar as A) both face perfectly elastic demand. characterized by the presence of a few large firms who produces Mutual interdependence among the firms in decision making is the essential feature of the oligopolistic market. E) None of the above. A firm in an oligopolistic market ______. That means higher the price, lower the demand. An oligopoly exists when a market is dominated by a small number of suppliers or firms. 31) Refer to Table 15.3.7. A) Dr. Smith advertises no matter what Dr. Jones does. 2. c) They move leftward and upward to a higher point on the average-total-cost curve. Based on the payoff matrix, if the two firms agreed to both follow national strategies there is an incentive for them to cheat. E) marginal revenue curve is upward sloping. E) Bud and Miller each have a dominant strategy. Their differences can range from. c) They lose most of their excess-production capability. b) pure monopoly If Marilyn believes that the $10 million stock issue was undertaken only to improve DTRs *To increase control over the product's price True or false: A cartel abides by a formally written agreement that specifies the output and price of each member firm and is a form of overt collusion. Oligopolies are typically composed of a few large firms. chapter 26 oligopoly Flashcards | Quizlet

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