Chapter 14 micro quiz

In a duopoly, if one firm increases its price, then the other firm can:

A. Keep its price constant and thus increase its market price

The kinked-demand curve of an oligopolist is based on the assumption that:

A. competitors will follow a price cut but ignore a price increase

Game theory:

A. is the analysis of how people or firms have in strategic situations

The term oligopoly indicates:

C. a few firms producing either a differentiated or a homogeneous product

In the short run, a profit- maximizing monopolistically competitive firm sets it price:

C. above marginal cost

Non price competition refers to:

C. advertising, product promotion, and changes in the real or perceived characteristics of a product

If oligopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry will be most accurately predicted by which of the following models?

C. the pure monopoly model

Which of the following statements is true

D. Games with a known ending date undermine reciprocity strategies

A Monopolistically competitive fLrm in the short run is producing where price is $3.00 and marginal cost is $1.50. To maximize profits:

D. it is unclear what the firm should do without knowing marginal revenue.

In the long run, new firms will enter a monopolistically competitive industry:

D. unit economic profit are zero