E) none of the above. a) There are a few large firms that make up the industry. View full document. *To decrease monopoly power C) the firms keep profits and prices so low that no rivals are . D) Bob denies and Art confesses. Which of the following is NOT a characteristic of an oligopoly? The distinctive feature of an oligopoly is interdependence. d) price leadership; kinked-demand, From society's standpoint, what are the effects of collusion in an oligopolistic industry? Welcome to EconTips, your number one source for all things about economics. Oligopoly. C) firms in monopolistic competition. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Which of the following is not a characteristic of an oligopoly? c) may be less desirable because they are not regulated by government to protect consumers Pure (Perfect) Competition. Compared to pure monopolies, oligopolies ______. 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. b) It will always be downward sloping because it is a price maker. What would have been DTRs debt to equity ratio if the$10 million of stock had not been An oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. But the other firms act considering the interdependence. c) give the appearance of increased competition It is one of the four market structures that include perfect competition, monopoly, and monopolistic competition. Small Number of Number: The number of firms in an oligopoly market is small where each firm controls an important proportion of the total supply. a) Dominant strategy *It eliminates competition among firms. The payoffs in the table are the economic profit made by Bud and Miller. d) have interdependent pricing. 8) 8)Which is not a characteristic of oligopoly? Cost of firm A is lower than firm B Profit maximizing price and quantity of firm A is PA and XA respectively. (Pure) Monopoly 3. Furthermore, no restrictions apply in such markets, and there is no direct competition. 6) According to the kinked demand curve theory of oligopoly, at the quantity corresponding to the kink, the firm's Instead, they try different approaches, such as rewarding customers for their loyalty, differentiating their product offerings, providing sales promotion schemes, acting as sponsors, etc. E) produce the efficient quantity. The urban land lease policy is not very friendly to rural households land in general and the poor land holders in particular. For a particular industry there may be a low four-firm concentration ratio since it is measured on a nationwide scale, but there can still be a local oligopoly. It is used as one of the strategies to increase the business firm's revenue and increase the market share.read more. d) cheat, Which of the following represent shortcomings of the four-firm concentration ratio? It is a reflection of quantity/output performance against cost/revenue performance. D. Th; Which of the following is a characteristic of an oligopoly market structure? *manipulating consumer preferences. Firm B adopts this price and sells XB(PA) and the quantity is Xbe. 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? 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in While it is true that strategic behavior and mutual interdependence characterize oligopolies, this is not the reason why they are price makers. d. 2. . If one of the firms cheats on this agreement, what will happen? a) depends on the actions of rivals to price changes The firms comprise an oligopolistic market, making it possible for already-existing smaller businesses to operate in a market dominated by a few. Determinants of Price Elasticity of Supply. a) are less efficient due to competition Due to minimal competition, each of them influences the rest through their actions and decisions. Which of the five do you feel is the most important? a) Its demand curve is downward-sloping b) An outcome in the payoff matrix from which both firms want to deviate since the current strategy is not optimal for either firm. d) through advertising, Firms have a desire to cheat on a collusive agreement because ______. Its main characteristics are discussed as follows: 1. c) regulated monopoly Either way, Id like to hear from you. b) upward-sloping A Computer Science portal for geeks. What are three models used to study pricing and output by oligopolies? This market structure can be competitive and sometimes less competitive. You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. Because of this, every firm takes decisions very carefully by considering the possible reactions of the rival firms. b) flexible In such a system, determining the proportion of total product used for investment . corporations president in exchange for some land just before the negotiations with lenders began. c) It will always be kinked because it is a price maker. 30.331.934.432.831.132.230.736.830.530.634.533.130.131.030.730.930.730.230.637.931.131.134.630.233.132.130.631.530.230.330.930.031.630.234.434.230.230.131.434.133.732.732.432.831.030.733.435.730.730.4. For an industry to be considered an oligopoly the four-firm concentration ratio must be ______. a) price changes occur slowly C) Dr. Smith advertises only if Dr. Jones doesn't advertise. b) Affect profits without influencing the profits of rival firms Consequently, the sales of the other firm will be definitely reduced by the same percentage. Besides, high capital requirements, licensing, patents, market demand, economies of scale, limit-pricing, and customer loyalty restrict the entry of new businesses. D. 2021. ratio. c) All oligopolists' or imperfect competitors' demand curves are down-sloping because they are price makers. C. Some market power. Typically, this means that at least 40% of the market is controlled by a few firms. 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. OA. believes that DTRs debt to equity ratio of 1.6 is probably the minimum that lenders will accept. 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]. a) its rivals do not respond to either a price cut or price increase 0. Marginal 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. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. Oligopolists offer comparable products or services, so they control prices rather than the market. b) Collusive pricing model b) are always less efficient c) its rivals match a price increase but ignore a price cut Perfect competition is a market in which there are a large number of buyers and sellers, all of whom initiate the buying and selling mechanism. Oligopolists do not stress competing with each other on the pricing front. 4. a) collusion; cartel 9) If the efficient scale of production only allows three firms to supply a market, the market is a, 10) A cartel is a group of firms that agree to. c) Kinked-supply curve model Chapter 15: Monopolistic Competition and Olig, Pesticide Applicator Certification Core Manual, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal. B) interdependence of firms. Select one: O a. there are a few firms that are mutually interdependent O b. when one firm in an oligopoly raises its price, other firms will follow O c. firms may collude in order to act like a monopoly O d. barriers to entry exist to limit the entrance of new firms