which is not a characteristic of oligopoly

b) An outcome in the payoff matrix from which both firms want to deviate since the current strategy is not optimal for either firm. C) the good produced in the market has been deemed a necessity It determines the law of demand i.e. Advertising benefits society by ______. B) perfectly inelastic demand. Oligopolyis a market structure Have you a question about something that I covered. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Each optometrist can choose to advertise his service or not. Marilyn is also aware that DTR issued$10 million of common stock to a long-time friend of the Marilyn D) the four-firm concentration ratio for the industry is small. The market has been shared equally by firms A and B, The cost of firm A is lower than firm BProfit maximizing the output of firms A is XA and the price is PA. Firm B adopts this price and sells XB(=XA) amount. *providing misleading information *price elasticity of demand c) inflexible B) the firms may legally form a cartel. The labor productivity at this plant is known to have been 0.100.100.10 vans per labor-hour during that month. c) It will always be kinked because it is a price maker. d) have interdependent pricing. E) equilibrium price and quantity will be insensitive to small demand changes. a) increasing firm profits d) The firms in the industry are interdependent. In an oligopoly, dominant market players are influential enough to decide on the price of products and services. 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. C) lower the price of their products. Its main characteristics are discussed as follows: 1. What is the characteristics of oligopoly? b) The possibility of price wars diminishes, but profits might be lower. Either way, Id like to hear from you. E)Firms are profit -maximizers. D) assumes that competitors will match price cuts and ignore price increases. 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? Cost of firm A is lower than firm B Profit maximizing price and quantity of firm A is PA and XA respectively. a) purely competitive market B) revenues, elasticity, profit, and payoffs. When the negotiations began, DTR had debt of$80 million and equity of $50 million. All firms stick to what has been decided, thereby ensuring price stability in the sector. 16) The firms Trick and Gear form a cartel to collude to maximize profit. C) Miller has a dominant strategy but Bud does not. a) major firms in an industry ranked by employment The land is in an area zoned only for c) By changing pricing strategies It is used as one of the strategies to increase the business firm's revenue and increase the market share. Which one of the following is the most important reason? D) There is more than one firm in the industry. Furthermore, no restrictions apply in such markets, and there is no direct competition. b) The number of employees in an industry who ever have or are currently working for one of the four largest firms In the scenario above, the market is. c) is always downward sloping (Figure) summarizes the characteristics of each of these market structures. E) only when there is no Nash equilibrium. . A) This game has no dominant strategies. b) kinked demand *To increase economies of scale. However, DTR does not intend to build any single family homes. Such companies have complete control of the market, earning high profits and gains in a specific sector or service. This way, Samsung and Nokia ensure non-price competition by enhancing core capabilities to build a loyal customer base. A) there are only two producers of a particular good competing in the same market E) cheat on each other. d) Its marginal revenue curve would consist of two segments, d) Its marginal revenue curve would consist of two segments E) both are price takers. The concentration ratio is a tool that measures the market share leading companies have in an industry. B) unit elastic. So here we can see a one-way interdependence pattern. A characteristic found only in oligopolies is A) break even level of profits. c) conveying information to consumers E) a competitive market produces two goods. d) Interindustry competition, Which are barriers to entry in both monopolies and oligopolies? Price collusion caused by market transparency and other factors enables oligopolists to raise their barriers to market entry for new competitors, such as high capital requirements, legal obligations, and consumer loyalty. C) one prisoner has no chance to be acquitted since there is no other prisoner to support his testimony. B) potential entrants entering and incurring economic loss. Given the emergence and expected evolution of AI-driven services in various niches, it is likely that there will be a highly concentrated market devoted explicitly to the AI needs of consumers. D. El desempleo voluntario hace que no se produzca el crecimiento econmico. a) are always more efficient b) price leadership; collusion a) The possibility of price wars diminishes and profits are maximized. D) is not; to comply when the other firm complies and to cheat when the other firm cheats C) there are numerous producers of two goods competing in a competitive market 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, E) none of the above. c) price leadership c) have no rivals A game that is played more than once between rivals is a ____ (Enter one word) game. E) unknown. D) marginal revenue curve is discontinuous. d) Its marginal revenue curve would consist of two segments what are the 5 characteristics of an oligopoly? It helps avoid the potential price war and price rigidity. B) both prisoners deny. c) sales of the largest firms in an industry B) the courts. b) potential for mergers and acquisitions In short,AI oligopoly is all set to shape the market, comprising a few large AI service providers dominating and influencing others in the business. *Increase profits A) costs, prices, profit, and strategies. That is, the large firm acts independently. d) can set its price and output to maximize profits. d. c) Blue jean designer a. small number of firms b. has some pricing power c. the firms are interdependent d. the good produced may be unique or not e. low barriers to entry; Which of the following is not a characteristic of an oligopolistic market structure? A. cutting prices a) By decreasing total suppliers $15. O B. *dominant firms b) Strategies are chosen for a single time period. D) is; the smaller firms cannot become the dominant firm E) Bud and Miller each have a dominant strategy. Due to minimal competition, each of them influences the rest through their actions and decisions. E) marginal revenue curve is upward sloping. 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. B) This game has no Nash equilibrium. a) necessary In December, General Motors produced 6,600 customized vans at its plant in Detroit. D) A and B. Social Studies, 22.06.2019 00:00. e) straight. A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating. a) Import competition Therefore, necessarily they tend to react. a- Compute the Cournot equilibrium total quantity, price, quantity for each firm, and . If this occurs, then the firm's demand curve will look ______. It also means that each firm must be aware of the reaction of others to their actions. *world trade C) both have MR curves that lie beneath their demand curves. 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. C) other firms will raise their prices by an identical amount. C) 2. If the products of the firms are differentiated the degree of interdependence is then weakened. Mr. mann's science students were experimenting with speed. A) a firm in an oligopoly market. OA. Marketers highlight the distinguishing features in the product commonly through packaging or a good design, which helps communicate the benefitting factors to the shoppers. Oligopolists offer comparable products or services, so they control prices rather than the market. B) rivalry among a large number of rivals leads to lower overall profit. We are dedicated to providing you with the very best in economics knowledge, with an emphasis on microeconomics and macroeconomics. 41) Refer to Table 15.3.12. A. firms have no control over their price B. firms may sell a differentiated product C. firms have market power D. firms may sell a standardized product E. the market contains a few large products A, C In an oligopolistic market, the two types of retaliation include. C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." 6) Wal-Mart follows the kinked demand curve model of oligopoly. B) equilibrium price and quantity will be insensitive to small cost changes. D) potential entrants not entering the market. The distinguishing characteristics of oligopoly are briefly explained below: 1. Characteristics: There are few firms in the market serving many consumers. Raised barriers to entry, price-making power, non-price competition, the interdependence of firms, and product differentiation are alloligopoly characteristics. E) marginal cost. C) independence of firms. The distinctive feature of an oligopoly is interdependence. always one step ahead. The profit-maximizing price of firm B is PB(>PA) and the quantity is Xbe. What are the 4 characteristics of oligopoly? 13) A dominant firm oligopoly might be one for which the Herfindahl-Hirschman Index is e) undefined, In the graph, the price elasticity of demand is highly ______ above the price of P0. d) Localized markets, Suppose the rivals of an oligopolistic firm ignore both a price increase and decrease. A) is; all other firms act as if they are perfectly competitive B) is not; other firms can enter, which increases supply, decreases the price, and drives economic profit down to zero D) There is more than one firm in the industry. D) the industry is government regulated The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. d) price changes are often difficult to match *increasing sales and output Keep its price constant and thus increase its market share B. C) the HHI for the industry is small. 14) A duopoly occurs when ________. oligopoly, monopoly, monopolistic competition, pure competition pure competition, monopolistic competition, oligopoly, monopoly. As a result, monopolists produce less, at a higher average cost, and charge a higher price than would a combination of firms in a perfectly competitive industry. D) neither is protected by high barriers to entry. D) equilibrium quantity will be sensitive to small cost changes but price will not. The value denotesthe marginalrevenue gained. c) They move leftward and upward to a higher point on the average-total-cost curve. b) are less efficient because they are often regulated by the government In the credit card industry, for example, Visa and MasterCard have a duopoly.read more. E) potential entrants taking all the business away from existing firms. What are the 4 characteristics of oligopoly? *It helps reduce demand for material products. 2003-2023 Chegg Inc. All rights reserved. Each firm is so large that its actions affect market conditions. Segn Ricardo no es posible que exista equidad en el mercado debido a que: A. a) Its demand curve is downward-sloping 2) In the dominant firm model of oligopoly, the larger firm acts like they set up a 1 meter (100 cm) track. Pure (Perfect) Competition. C) the firms keep profits and prices so low that no rivals are . 1) A cartel is a group of firms which agree to D) the one producer of two goods sells the goods in a monopoly market In the graph, the price elasticity of demand is ______ below the price of P0. bc it's similar to monopoly but has the difference of having more firms lol. C) average variable cost curve is discontinuous. It is assumed that all of the sellers sellidentical or homogenous products. On the other hand, if an oligopolist reduces output by raising prices, the rest refrain from doing so. a) gentleman's agreement C) average total cost. e) It could be downward sloping or kinked. They are 12) Which one of the following quotations best describes the kinked demand curve model of oliogopoly? 18) A market with a single firm but no barriers to entry is known as 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. Question: Which of the following is NOT a characteristic of an oligopoly? $1. C) lower the price of their products. c) Nash equilibrium Advertising can reduce efficiency by ______. C) perfectly elastic demand. E) none of the above. B) both firms comply with the agreement. C) equilibrium price will be sensitive to small cost changes but quantity will not. ADVERTISEMENTS: This fact is recognized by all the firms in an oligopolistic industry. d) They do not achieve allocative efficiency because their price exceeds marginal cost. However, too much price decrease can lead to a price warPrice WarA price war is a competition among the competitors of the business in lowering the price of their products to gain an advantage over their competitors in price and capture a greater market share. 8) A weakness of the kinked demand curve theory of oligopoly is that it does not What kind of game is it if the firms must choose their pricing strategies at the same time? $4. 10) In the dominant firm model of oligopoly, the dominant firm produces the quantity at which marginal revenue equals E) is not; frequently one of the smaller firms becomes the dominant firm, and the original dominant firm becomes less important. Pure because the only source of market power is lack of competition. *The firm's demand curve will shift further to the left. The financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. a) prices; uncertainty; increase . a) It could be downward or upward sloping. C) Dr. Smith advertises only if Dr. Jones doesn't advertise. as the price increases, demand decreases keeping all other things equal.read more shifts. 6) Which one of the following characteristics applies to oligopolistic markets? Consequently, each firm must condition its behavior on the behavior of the other firms. An oligopolistic firm's marginal revenue curve is made up of two segments if ______. A. Based on the figure, if RareAir honors an agreement with Uptown to price high, and Uptown needs to increase profits due to stockholder pressure, Uptown will price ______. b) The Herfindahl model 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) 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 encourages existing brands to improve product quality and originality by instilling a sense of rivalry. I really hope you learned this article. A small number of sellers. D)There is more than one firm in the industry. If one firm is large enough to account, which is that 80% of sales in the industry. d) Oligopolistic collusion, Compared to monopolies, oligopolies ______. Why is collusion desirable to oligopolistic firms? The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. d. 2. . 26) Refer to Table 15.3.4. B) the firms may legally form a cartel. What are the four characteristics of market structure? Brand reputation, company size, and minimal completion make decision-making crucial and influential across the group. The need to spend a huge amount of money on name recognition and market reputation may discourage entry by new firms. B) in a single-play game but not a repeated game. D) entry into the industry of rival firms will have no impact on the profit of the cartel. at least $10 million. E 12) Because an oligopoly has a small number of firms A) each firm can act like a monopoly. Non-Collusive Oligopoly-Sweezy's Kinked Demand Curve Model (Price-Rigidity) Usually, in Oligopolistic markets, there are many price rigidities. 1. E) more elastic than the demand just above the price at the kink. B) "Every time Sparrow's Donuts has a donut sale, so does Tim Horton's." 14) The kinked demand curve model The firms produce differentiated products. . Mutual interdependence among the firms in decision making is the essential feature of the oligopolistic market. Greater the number of firms, the higher the degree of interdependence. *Patents, *Preemptive pricing b) its rivals match a price cut but ignore a price increase East Asian regimes tend to have similar characteristics First they are orien. b) are few in number corporations president in exchange for some land just before the negotiations with lenders began. 8) Which of the following quotes shows a contestable market in the widget industry? (Enter one word per blank. Based on the figure, if one firm cheats on the collusive agreement it can increase its payoff by c) Dominant firms 9) Which isnota characteristic of oligopoly? 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]. D) Consumers will eventually decide not to buy the cartel's output. *Patents, Which are reasons that that firms merge? Strategic independence. E) a cartel. A) the government will impose price controls. A dominant-bank oligopoly confronting a competitive fringe There are two sets of banks: dominant banks and fringe banks. d) By updating manufacturing equipment, What is the four-firm concentration ratio? A) a market where three dominant firms collude to decide the profit-maximizing price. When two major players dominate a sector, the market becomes a duopolyDuopolyWhen there are two market leaders in any industry or service, this is referred to as a duopoly. c) They move leftward and upward to a higher point on the average-total-cost curve. single family housing and would be an attractive site for single family homes. d) is always kinked Based on the payoff matrix, if the two firms agreed to both follow national strategies there is an incentive for them to cheat. price rigidity Element of monopoly. Thus, the land is worth Marginal revenue = Change in total revenue/Change in quantity sold. East Asian regimes tend to have similar characteristics First they are orien. A Which of the following is not a characteristic of oligopoly? D) monopolistic competition. A) Each firm has an incentive to collude. D) perfectly inelastic. 21) It is difficult to maintain a cartel for a long period of time. d) cost leadership. What kind of problem does this represent with the four-firm concentration ratio? 5) Which one of the following characteristics applies to oligopolistic markets? a) They do not achieve allocative efficiency because their average total cost exceeds price. It can be also called as one form. a) Affect profits and influence the profits of rival firms . d) They do not achieve allocative efficiency because their price exceeds marginal cost. Four characteristics of an oligopoly industry are: Few sellers. Typically, this means that at least 40% of the market is controlled by a few firms. D) unit elastic demand. O D. Some barriers to entry. C) is; the dominant firm is making an economic profit They do it strategically so they do not lose their customers in what could be a price war. B) Firms are profit-maximizers.C) The sales of one firm will not have a significant effect on other firms. Determinants of Price Elasticity of Supply. read more, and marginal revenue is the product price. b) it will lower the firm's costs 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. Oligopoly is an important form of imperfect competition. *Diseconomies of scale D. Th; Which of the following is a characteristic of an oligopoly market structure? B) neither player would be willing to change his or her decision unless the other player also changes his or her decision. One of theoligopoly characteristicsis the focus of its members on improving the product quality or offering benefits to make their brand unique. Thus, each firm gains a considerable market share with minimal potential profits. e) low to receive a payout of $8. a) low to receive a payout of $15 E) the firms are interdependent. 5) A market with a dominant firm and with weak barriers to entry ________ in long-run equilibrium because ________. A) average total cost curve is discontinuous. A) "I am producing extra widgets, even though it costs me short-run profits, to stop Wally's Widgets from expanding into my market." *world trade a) productive efficiency but not allocative efficiency These data are as follows: 30.334.531.130.933.731.933.131.130.032.734.430.134.631.632.432.831.030.230.232.831.130.733.134.431.032.230.932.134.230.730.730.730.630.233.436.830.231.530.135.730.530.630.231.430.730.637.930.334.130.4\begin{array}{lllll}30.3 & 34.5 & 31.1 & 30.9 & 33.7 \\ 31.9 & 33.1 & 31.1 & 30.0 & 32.7 \\ 34.4 & 30.1 & 34.6 & 31.6 & 32.4 \\ 32.8 & 31.0 & 30.2 & 30.2 & 32.8 \\ 31.1 & 30.7 & 33.1 & 34.4 & 31.0 \\ 32.2 & 30.9 & 32.1 & 34.2 & 30.7 \\ 30.7 & 30.7 & 30.6 & 30.2 & 33.4 \\ 36.8 & 30.2 & 31.5 & 30.1 & 35.7 \\ 30.5 & 30.6 & 30.2 & 31.4 & 30.7 \\ 30.6 & 37.9 & 30.3 & 34.1 & 30.4\end{array} Firms in the industry make price and output decisions with an eye to the decisions and policies of other firms in the industry. A) Strategic Independence Here, they focus on each other and try to exceed customer expectations in every possible way. 0. *Ownership and control of raw materials a) collusion; cartel The concentration ratio measures the market share of the. The number of suppliers in a market defines the market structure. C)The sales of one firm will not have a significant effect on other firms. It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. e) Firms may sell a differentiated product. ), Oligopolists often compete through product development and advertising instead of price because ______. c. Competing firms can enter the industry easily. How are profitability and risk impacted by changes in the current liabilities to total assets ratio?

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