C) perfectly elastic demand. D) equilibrium quantity will be sensitive to small cost changes but price will not. Pure or Perfect Oligopoly: If the firms produce homogeneous products, then it is called pure or perfect oligopoly. For example, the existing firms might threaten to reduce the price drastically if entry occurs. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. In second-degree price discrimination the monopolist offers a menu of quantity-based pricing options designed to induce customers to self-select based on how highly they value the product. 9) In the dominant firm model of oligopoly, the dominant firm faces a C. The choices made by one firm have a significant effect on other firms. However, firm B follows the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. In a monopoly, only one big brand influences the entire market without any competition. In the graph, the price elasticity of demand is ______ below the price of P0. Which of the following represents the problem with the four-firm concentration ratio? 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. Short run equilibrium in monopolyPerfect Competition: Definition, Graphs, short run, long runTop 5 characteristics of an oligopolyMonopoly Price discrimination: Types, Degrees, Graphs, ExamplesDifferent Types of Monopolies| 7 TypesMonopolistic competition assumptionsMonopolistic Competition Equilibrium| Long-run| Short-runMonopolistic Competition and Economic Efficiency. D) the four-firm concentration ratio for the industry is small. 14) The kinked demand curve model The amount of time (in seconds) needed to complete a critical task on an assembly line was measured for a sample of 50 assemblies. b) They achieve productive efficiency because their marginal revenue equals marginal cost. However, at this price profit of firm B is not maximized. *increasing sales and output ENGL1190_V0854_2023WI_Communications23.docx. b) are few in number b) It will always be downward sloping because it is a price maker. A) collusion of the participants leads to the best solution from their point of view. b) Collusive pricing model List the three steps followed under the gross profit method of estimating inventory. *It eliminates competition among firms. Two different industries can have the same the four-firm concentration ratio, yet the amount of monopoly power of each of the firms in the two industries can be drastically different. 13) A dominant firm oligopoly might be one for which the Herfindahl-Hirschman Index is *To increase control over the product's price B) "I am producing more widgets than Wally and I agreed to in our talk last week." 21) It is difficult to maintain a cartel for a long period of time. True or false: A one-time game occurs when firms will choose their pricing strategy for today without concern about future interactions with their rivals. C) 2. What is oligopoly and its characteristics? What happens to oligopolistic firms when a recession occurs? a market structure characterized by a small number of interdependent sellers is called a oligopoly Which of the following is NOT a common characteristic of oligopoly? When firm X increases its price. b) Lower prices, but greater output A single D) firms in perfect competition. b) Strategies are chosen for a single time period. Keep its price constant and thus increase its market share B. c) Affect costs and influence the supply of rival firms a) fewer firms than monopolistic competition. xxx\underline{\phantom{\text{xxx}}}xxx. b) interindustry competition 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, B) a contestable market. Marilyn has been involved in negotiations between DTR and prospective lenders as DTR B) collusion d) lowering the cost of production A monopoly occurs when. ENGL1190_V0854_2023WI_Communications23.docx. *Large capital investment C) in a repeated game but not a single-play game. as the price increases, demand decreases keeping all other things equal. characterized by the presence of a few large firms who produces 1) In the dominant firm model of oligopoly, the smaller firms behave as 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. a) There are a few large firms that make up the industry. In other words, when there are two or more than two, but not many, producers or sellers of a product, oligopoly is said to exist. c) Firms' advertising decisions are interdependent. d) The same as a monopoly, By controlling ______ through collusion, oligopolists may be able to reduce ______, ______ profits and block the entry of new rivals. 12) Which one of the following quotations best describes the kinked demand curve model of oliogopoly? *The firm's demand curve will shift further to the left. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. d) greater than or equal to 60%, How can oligopolistic firms influence their profits and the profits of their rivals? A. d) its rivals match both a price cut and price increase, b) its rivals match a price cut but ignore a price increase, When members of an oligopoly meet to set prices to maximize profits it demonstrates the ______ and/or the ______ model. The distinctive feature of an oligopoly is interdependence. 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. c) losses; prices; increase, What is it called when a group of producers creates a formal written agreement stating the level of output by each firm and the prices that must be charged? d) is always kinked Which one of the following observations is correct? A market is deemed oligopolistic or extremely concentrated when it is shared between a few common companies. Such companies have complete control of the market, earning high profits and gains in a specific sector or service. complexes. D) specify how average cost is determined. a) kinked and steep debt to equity ratio and that it will be reversed whenever the presidents friend wants the In the credit card industry, for example, Visa and MasterCard have a duopoly. d) Dominant firms, What are oligopolists able to do by controlling price through collusion? a) They move downward and to the right to a lower operating point on the average-total-cost curve. D) 2,750. D) Bud has a dominant strategy but Miller does not. 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? Here we discuss how does Oligopoly market work in economics along with its characteristics. *interindustry competition A) This game has no dominant strategies. However, at this price profit of firm B is not maximized.The profit-maximizing price of firm B isPB (>PA) and the quantity is Xbe (