micro chapter 15

Oligopoly

is a market in which there are only a few sellers, each offering a product similar or identical to the products offered by other firms in the market

The firms reach a Nash equilibrium

this produces the largest collective profits for oligopolists?

downward sloping

Product differentiation causes the seller of a good to face what type of demand curve?

d

1. Monopolistic competition is characterized by which of the following attributes? (i) free entry (ii) product differentiation (iii) many sellers A. (i) and (iii) only B. (i) and (ii) only C. (ii) and (iii) only D. (i), (ii), and (iii)

is desirable for society as a whole

A failure of cooperation among oligopolists trying to secure monopoly profits

both market structures feature easy entry by new firms.

A monopolistically-competitive market is like a competitive market in that

single monopolist

As a group, oligopolists would always be better off if they would act collectively as a

competitive market outcome

As the number of firms in an oligopolized market increases, and provided the firms do not successfully collude, the market approaches the

increase

Cecilia's Café operates in a monopolistically competitive market. Cecilia's is currently producing where its average total cost is minimized. In the long run, we would expect Cecilia's output to decrease and ATC to

monopoly

Once a cartel is formed, the market is in effect served by a

lower, higher

The equilibrium price in a market characterized by a competitive oligopoly is _______ than in monopoly markets and ______ than in perfectly competitive markets

both economic profits and economic losses disappear in the long run.

The free entry and exit of firms in a monopolistically-competitive market guarantees that

difficulty of maintaining cooperation.

The prisoners' dilemma provides insights into the

higher, lower

The total quantity of output produced in a (noncollusive) oligopoly market is _______ than the total quantity of output that would be produced if the market were a monopoly, but ________ than the total quantity of output that would be produced if the market were perfectly competitive.

perfectly competitive

a firm is a price taker when the market is

pizza restaurants in NYC

an example of a monopolistically-competitive industry

cartels

are difficult to maintain because there is always tension between cooperation and self-interest