MicroEcon Chapter 18 Study Guide

When oligopolies seek to operate as a single-price monopoly, the firms produce at the point where ________________

MR=MC (marginal revenue= marginal cost)

When firms in an oligopoly successfully collude and do not cheat on a cartel agreement, they can make a long-run economic profit similar to ______________________

Monopoly

A cartel is _______________

a group of firms acting together to raise price, decrease output, and increase economic profit

Sammy's Inc. competes with a few other firms because there are natural barriers to entry. Sammy's operates in ___________________

an oligopoly

When oligopolies operate like firms in perfect competition, the firms produce at the point where the _____________

marginal cost equals the price

The very best joint outcome possible for the firms in a duopoly is to produce the ____________

monopoly level of output

Game theory is used to analyze the interactions among firms in ________________

oligopoly

The fact that firms in oligopoly are interdependent means that ____________________

one firm's profits are affected by another firms' actions

The range in which a duopoly's output falls is less than or equal to the output level in _____________ and more than or equal to the output level in ___________________

perfect competition ; monopoly

Economists use game theory to analyze strategic behavior, which takes into account _______________

the expected behavior of others and the recognition of mutual interdependence