t3 cp11
The HHI is often used instead of
concentration ratios to avoid the distribution issue
There is a range of competition within oligopoly and economists
disagree on how much.
A market defined as chicken will show more competition than a market defined as meat.
false
If the competitive price is $6 and the monopoly price is $10 then the Nash equilibrium is at $10.
false
Network advantage is a legal barrier.
false
The body of law that deals with competition problems is called anti-monopoly law.
false
The more similar goods in oligopoly are the more different their prices will be.
false
Which of the following is an artificial barrier to entry?
government licenses network advantage control of a raw material
The kinked demand curve model feels oligopolies
in the middle
If an industry is defined very broadly,
it will appear more competitive, its concentration ratio will be lower.
The higher the concentration ratio or HHI the
less competition there appears to be
The government has been concerned generally if the HHI above
1800 or rises by over 200
The tobacco, healthcare wholesale, and beverage industries all have a concentration ratio of over ____.
80
Which statement is true?
Cigarettes, motor vehicles, and pipelines are industries with high concentration ratios. Oligopolized industries have higher concentration ratios than monopolistic competitors. The Electric Machinery Conspiracy case involved covert collusion.
_____ is a decision tool that helps take into account the anticipated reactions of competitors.
Game Theory
Which one of these firms would be an oligopolist?
General Motors
Which of the following would NOT be an example of joint profit maximization?
Kinked demand.
According to the joint profit maximization model
Oligopolistic firms together will earn monopoly or near monopoly profits.
Artificial barriers lead to higher
P and lower Q, all other things equal
Which of the following is NOT part of oligopoly?
Probable negative long run economic profits.
Farm machinery and equipment has a concentration ratio of 54% and an HHI of 2133.8.
The concentration ratio signals a fairly competitive oligopoly and the HHI indicates one with a relatively high level of concentration.
The Nash equilibrium in the example below is: Firm A sets competitive P Firm A sets monopoly P Firm B sets competitive P Firm A makes $100,000 Firm B makes $100,000 Firm A makes $ 20,000 Firm B makes $150,000 Firm B sets monopoly P Firm A makes $150,000 Firm B makes $ 20,000 Firm A makes $120,000 Firm B makes $120,000
When both firms set the competitive price.
The Joint Profit maximization equilibrium in the example below is: Firm A sets competitive P Firm A sets monopoly P Firm B sets competitive P Firm A makes $100,000 Firm B makes $100,000 Firm A makes $ 20,000 Firm B makes $150,000 Firm B sets monopoly P Firm A makes $150,000 Firm B makes $ 20,000 Firm A makes $120,000 Firm B makes $120,000
When both firms set the monopoly price.
With a kinked demand curve an oligopoly faces stable prices mainly because of:
a break in the MR curve multiple MC curves lead to the same Q*.
An example of an oligopolistic industry would be:
cars
A concentration ratio of 100 would imply that the industry has __________.
no more than four firms
Oligopolies exist because
of measurable barriers to entry
The extreme competition or Nash equilibrium feels
oligopolies are at or close to the competitive end of the scale.
The market structure in which the behavior of any given firm depends on the behavior of the other firms in the industry is
oligopoly.
The joint profit maximization model feels oligopolies are at
or close to the monopoly end of the scale
The kinked demand curve exists when a firm's believes that:
price cuts will be matched but not price increases.
The typical concentration ratio is the percentage of ___ earned by the ___ largest firms in the industry.
sales; four
Oligopolies
small in number but large in size and output, producing the majority of goods
Oligopolies tend to have
stable prices and lots of nonprice competition
Which of the following is a type of overt collusion?
territorial agreements
The HHI is often used instead of the concentration ratio because of which problem?
the distribution issue.
How you define the market drives
the results you get with a competition measure
Along a kinked demand curve
the upper portion is more elastic, while the lower portion is more inelastic.
An oligopolist must be very sensitive to its rivals because
there are so few that their behavior may well have consequences for the firm.
An HHI over 1800 is traditionally considered to signal a concentration problem.
true
If the competitive price is $6 and the monopoly price is $10 then the joint profit maximization model will predict the oligopoly price is near $10.
true
It is hard to place American industry on the competitive spectrum because different industries have different competitive situations.
true
The 3 models of oligopoly are kinked demand, joint profit maximization and extreme competition.
true
The cartel and the extreme competition are on opposite ends of the competitive spectrum.
true
The natural barrier of large economies of scale is
unpredictable in effect on P and Q.