econ last

The long-run equilibrium would occur at an output level of ---thousand cases, and the price would be

4,6.5

Indicate the two most common numerical indicators of market concentration

-the Herfindahl-Hirschman Index (HHI)-the four-firm concentration ratio (CR4)

Suppose that Sally's initial weekly demand (Dl), marginal cost (MC), marginal revenue (MRI), and average total cost (ATC) curves are as shown in the graph in Tab 1. The profit-maximizing quantity of bracelets that Sally should produce and sell is bracelets. The price she should charge her customers is $0 (Do NOT press Enter after typing the answer in each cell. Use Tab or take the cursor to the next cell.)

12,8

Now suppose that Sally undertakes an aggressive social media campaign and increases her presence online, gaining a significant number of customers. Her new demand curve, D2, results in a new marginal revenue curve, MR2, shown in Tab 2.

18,10

Remembering that output is measured in thousands of cases, the total value of the deadweight loss generated as a result of reduced output is $

3500

Producing the goods and services that consumers most want in such a way that the marginal benefit equals the marginal cost is:

Allocative Efficiency

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

Large number of buyers and sellers standardized product easy entry and exit producers who are price takers

Allocative efficiency occurs when:

MB=MC

The four-firm concentration ratio (CR4) is expressed as a percentage between O and 100, where 100% represents a pure

MONOPOLY

The profit-maximization rules states that a firm should produce a level of output where

MR=MC

Which of the following is not a characteristic of an oligopoly?

Producers who are price takers

Which of the following is not a characteristic of monopolistic competition?

The products are standardized

A group of competing companies that aim to maximize joint profits by coordinating their policies to fix prices, manipulate output, or restrict competition is called a

cartel

A situation in which decision makers coordinate their actions to achieve a desired outcome describes:

collusion

The difference between the economic surplus when the market is at its competitive equilibrium and the economic surplus when the market is not in equilibrium is the:

deadweight loss

The value of the economic surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium is called deadweight

deadweight loss

In a monopolistically competitive market, each firm produces a face downward-sloping demand curves. product, so firms

differentiated

strategy is a situation in which a particular strategy yields the highest payoff, regardless of the other player's strategy.

dominant stradegy

Monopolistic competition and perfect competition have one main characteristic in common: relatively easy market and

entry exit

Profit maximization implies that monopolistically competitive firms should expand production up to the point where the marginal revenue equals the marginal cost.

equals true

The characteristics of an oligopoly market are:

everything but producers who are price takers.

The Sherman Act of 1890

made "every contract, combination, or conspiracy in restraint of trade" illegal.

To maximize profits, a cartel should produce a level of output where the revenue equals the cost.

marginal marginal

The percentage of total market sales accruing to one specific firm is called the share

market share

One common feature of competitive markets is that firms invest heavily in product development and innovation, which benefits greatly.

monopolisitcally consumers

In a competitive market, consumers can usually find exactly what they are looking for based on their preferences and budgets.

monopolistic

competitive firms are able to have some control over the price of their products.

monopolistically

games can have

more than one nash equilibrium

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 that oligopolistic firms are:

mutually independent

What is luckys dominant stradegy

no advertising

profit is also known as zero economic profit.

normal

Producers operating in oligopolistic markets generate:

normal profits and even losses in the short run

Monopolistic competition and a monopoly are:

not the same market structure.

In a(n) , there are a few large producers.

oligopoly

In an producers are price makers and behave strategically when making decisions related to the features, prices, and advertising of their products.

oligopoly

When there is productive efficiency:

output is produced at the lowest possible total cost per unit of production; output is produced using the fewest resources possible to produce a good or a service

matrix is a table showing the potential outcomes arising from the choices made by decision makers.

payoff table

The characteristics of an oligopoly competitive market are

producers who behave strategically when making decisions related to the features, prices, and advertising of their products. producers who are price makers. either standardized or differentiated products. a few large producers. operation in industries with extensive entry barriers.

Suppose the demand increases by 2,000 cases of output at every price. The new demand curve will

shift to the right by 2000

Given that oligopolistic firms face other competitors in their markets, their behaviour must definitely be

strategic

Which of the following prohibits mergers that would substantially lessen competition or create a monopoly,

the clayton act

Oligopolistic firms tend to price above their marginal and average total costs of production and are not subject to the intense competitive pressures. As a result,

the equilibrium output produced by an oligopolistic firm is neither allocatively nor productively efficient.

An industry is considered oligopolistic if the CR4 exceeds

40

The profit-maximizing quantity is cases, and the profit-maximizing price is $ per case. (Round off your answer to two decimal places for the second blank.) (Do NOT press Enter after typing the answer in each cell. Use Tab or take the cursor to the next cell.)

4000 6.5

Remembering that output is measured in thousands of cases, the productively efficient output level is cases. The firm would have to charge $ per case. (Enter your answers in whole numbers.)

6500 4.5

The top four firms in the retail surfboard industry maintain total sales of $8 million per year. If the entire retail surfboard industry sells $10 million worth of output, then the four-firm concentration ratio is % (use a number)

80%

Which of the following made "unfair methods of competition" and "unfair or deceptive acts or practices" illegal.

The federal trade commission act

Which of the following aspects of oligopolistic firms does game theory help us study?

Their strategic behavior

A market structure characterized by a single seller is a

monopoly

Laws designed to prevent firms from engaging in behaviors that would lessen competition in a market are called

antitrust

Two members of a criminal gang, George and Randy, are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The prosecutors do not have enough evidence to convict the pair on the principal charge. They hope to get both sentenced to a year in prison on a lesser charge. The payoffs are shown in Tab 2.

both confess

For monopolistically competitive firms, their products is important because many consumers do not like taking risks, and this way they can learn about products before buying them.

branding

Monopolistically competitive markets:

combine characteristics of competitive markets and pure monopolies.

Deadweight loss represents the amount of surplus and surplus forgone because the monopolistically competitive firm charges a price higher than the marginal cost.

consumer producer

a number of barriers are present in oligopolistic markets, including

entry

Assume most of the firms in the market experience the same increase in demand. The change will result in the firms'

initiallt have normal profits, when demand increases

Because competitive firms have some control over prices, the firms will charge consumers the price they are willing and able to pay for the available output, which is found by projecting the profit-maximizing output level onto the curve.

monopolistically demand

When a firm is producing at an output level where the MR = MC, it is following

the profit-maximization rule

A clear benefit to monopolistic competition for consumers is product

variety

In the presence of profits, firms enter a monopolistically competitive market until the market reaches the point at which the firms are generating a entry stops, and the market settles into its profit; then run equilibrium.

economic normal and long

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

elastic

After all firms experience increased demand, you expect to see other firms this market.

enter fall

sally

a loss 12

Two ice cream makers operate in the town of Smallville. One is Lucky's, and one is Jolly's. They are the only two ice cream makers in this market. Each is preparing for the summer ice cream season. For that preparation, each has tc choose whether or not to advertise. The payoffs are shown in Tab 2.

advertise

An outcome in which, unless the players can collude, neither player has an incentive to change his or her strategy is:

a nash equilibrium

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.

(P - ATC) x Q equals (one word).

profit

Producers operating in oligopolistic markets can generate normal in the short run. (Enter one word per blank.) and even

profit losses