MONOPOLISTIC COMPETITION AND OLIGOPOLY

For ______ competitive firms, branding serves as a signal to consumers about the products they are going to purchase

Monopolistically

_______ firms can influence the prices they charge for their behavior needs to be strategic, given that they face other competitors in their industries

Oligopolistic

T/F Games can have more than one Nash equilibrium

True

A situation in which a particular strategy yields the highest payoff, regardless of the other players strategy is

a dominant strategy

monopolistic competition is a market characterized by

a relatively large number of sellers producing a differentiated product for which they have some control over the price they charge in a market with relatively easy market entry and exit

To calculate profit, which three pieces of information must be identified

average total cost, price, quantity of output

a situation in which individuals, firms, or any group of actors coordinate their actions to acheive a desired outcome is

collusion

Monopolistically competitive markets

combined characteristics of competitive markets and characteristics of pure monopolies

because the products of monopolistically competitive firms are ______ from other companies in their industry, the demand they face is ____ sloping

differentiated, downward

Which of the following are the four characteristics of a perfectly competitive market?

large numbers of buyers and sellers standardized product easy entry and exit producers who are price takers

A market structure characterized by a relatively large number of sellers producing a differentiated product, for which they have some control over the price they charge, in a market with relatively easy market entry and exit is known as ____________

monopolistic competition

for_____ competitive firms, branding is important because many consumers do not like taking risks

monopolistically

The demand for a monopolistically competitive firm is ____ elastic than the demand faced by a pure monopoly because of the availability of close substitutes

more

In a monopolistically competitive market, competitors make close substitutes, so demand curves are relatively ____ elastic than those faced by monopolies and ____

more,less

The ____ interdependence observed among oligopolistic firms is often studied using the tools of game theory

mutual

A manufacturer's profits are determined not only by its decisions but also by the decisions of the other firms in the industry. This is why we say oligopolistic firms are

mutually interdependent

Monopolistic competition and a monopoly are

not the same market structure

in an ____ market there are relatively few firms and the product is either standardized or differentiated

oligopoly

in an oligopoly

producers may or may not earn economic profits

producers operating in oligopolistic markets can generate normal _____ and even _____ in the short run

profit, losses

a monopolistically competitive firm should produce output until the marginal _____ equals the marginal ____

revenue, cost

A number of entry barriers are present in oligopolistic markets including:

significant costs of capital, control of the resources needed to produce output, patents, economies of scale that may allow only a small number of firms to operate in a market, pricing stategies

zero economic profit is when the firm's revenue equals its operating costs without a loss

when the firm's revenue equals its operating costs without a loss