FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 17: Oligopoly

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 121

Multiple Choice

Review LaterAdd Note

Review Later

Table 17-6 Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring the water to town, and to sell it at whatever price the market will bear. Assume Kunal and Naj can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water are shown in the table below. -Refer to Table 17-6. Suppose the town enacts new antitrust laws that prohibit Kunal and Naj from operating as a monopolist. Once the Nash equilibrium is reached, how much profit will each producer earn?

A) $400.00
B) $437.50
C) $450.00
D) $800.00

E) A) and B)
F) B) and C)

Correct Answer

verified

Show Answer

Question 122

Multiple Choice

Review LaterAdd Note

Review Later

In choosing among alternative courses of action, Raj must consider how others might respond to the action he takes. In the language of game theory, we say that Raj must think

A) openly.
B) strategically.
C) dominantly.
D) cooperatively.

E) All of the above
F) A) and B)

Correct Answer

verified

Show Answer

Question 123

Multiple Choice

Review LaterAdd Note

Game theory is useful to analyze oligopoly markets because

Table 17-27 Each year the United States considers renewal of Most Favored Nation (MFN) trading status with Farland (a mythical nation) . Historically, legislators have made threats of not renewing MFN status because of human rights abuses in Farland. The non-renewal of MFN trading status is likely to involve some retaliatory measures by Farland. The payoff table below shows the potential economic gains associated with a game in which Farland may impose trade sanctions against U.S. firms and the United States may not renew MFN status with Farland. The table contains the dollar value of all trade-flow benefits to the United States and Farland. -Refer to Table 17-27. Pursuing its own best interests, Farland will impose trade sanctions against U.S. firms

Which of the controversial business practices, resale price maintenance, predatory pricing, or tying, was a part of a long-running antitrust lawsuit against Microsoft and why?

Table 17-21 The Chicken Game is named for a contest in which drivers test their courage by driving straight at each other. John and Paul have a common interest to avoid crashing into each other, but they also have a personal, competing interest to not turn first to demonstrate their courage to those observing the contest. The payoff table for this situation is provided below. The payoffs are shown as (John, Paul) . -Refer to Table 17-21. If Paul chooses Turn, what will John choose to do and what will John's payoff equal?

The primary purpose of antitrust legislation is to

In game theory, a Nash equilibrium is

Oligopolies can end up looking like competitive markets if the number of firms is

We must be knowledgeable of how people behave in strategic situations if we are to understand

An agreement among firms in a market about quantities to produce or prices to charge is called

Table 17-17 This table shows a game played between two firms, Firm A and Firm B. In this game each firm must decide how much output (Q) to produce: 2 units or 3 units. The profit for each firm is given in the table as (Profit for Firm A, Profit for Firm B) . -Refer to Table 17-17. Which of the following outcomes represent the Nash equilibrium in this game?

Table 17-22 Brian and Matt own the only two bicycle repair shops in town. Each must choose between a low price for repair work and a high price. The annual economic profit from each strategy is indicated in the table. The profits are shown as (Matt, Brian) in each cell. -Refer to Table 17-22. Which of the following statements is correct if Brian and Matt will play this game only once?

Table 17-6 Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring the water to town, and to sell it at whatever price the market will bear. Assume Kunal and Naj can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water are shown in the table below. -Refer to Table 17-6. If the market for water were perfectly competitive instead of monopolistic, how many gallons of water would be produced and sold?

Table 17-33 Suppose that Robert and Howard own the only two movie studios in California. Each producer must choose between a low budget and a high budget strategy for his next film. The economic profit from each strategy is indicated in the table below: Howard Low budget High budget -Refer to Table 17-33. Is there a Nash equilibrium? If so, describe it.

If the output effect is larger than the price effect, an individual firm will __________ production.

Table 17-11 Only two firms, ABC and XYZ, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost. -Refer to Table 17-11. If this market were perfectly competitive instead of oligopolistic, what quantity would be produced?

The prisoners' dilemma game

A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is called

A special kind of imperfectly competitive market that has only two firms is called