EC 201 Lecture Notes - Lecture 13: Oligopoly, Marginal Revenue, Marginal Cost

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crimsonwallaby906

31 Mar 2016

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An oligopoly is an industry with just a few irms. There is no set rule on how a irm can maximize proit in an oligopoly. Set rule for perfect compeiive market- price should be same as marginal revenue and marginal cost. Occurs when a group of irms acts as a monopoly and the irms split the proit. The group is called a cartel if the collusion is explicit. They act jointly as if they were a monopoly. As long as they have a higher proit, they split. What the players win depends on the decisions. Each player tries to maximize this playof. The suspects are separated from each other.

Related Questions

In a monopolistically competitive market, the rule for maximizing profit is to set MR=MC, which means

Price is higher than marginal revenue

Price is equal to marginal cost

Price is equal to marginal revenue

Price is lower than marginal revenue

Perfect competition displays________________________ because the social benefits of additional production, as measured by the price that people are willing to pay, are in balance with the _____________________to society of that production

Economic efficiency; marginal revenues

Allocative efficiency; marginal costs

Economic efficiency; total revenues

Allocative efficiency; total costs

How can parties who find themselves in a prisoners dilemma situation avoid the undesired outcome and cooperate with each other

Find effective ways to penalize firms who do not cooperate

Sign legally enforceable contracts setting out their mutual agreement to act like a monopoly

One oligopoly can physically beat up another oligopoly

By seeking alternatives to create pressure for members to keep output up and prices up

In the framework of an oligopoly, what strategy can work like a silent form of cooperation

Always match other cartel firmsï¿½ price cuts, but donï¿½t match price increases

Immediately match price increase

Legally enforcement agreements

fuchsialocust206

Homework help and study guide help, all multiple choice

A monopolist:

A) can sell as much as it wants at the chosen price because it is the only seller.

B) can increase the price only if it is willing to decrease the quantity sold.

C) can increase the price and the quantity sold at the same time.

D) is not restricted by the law of demand.

A monopolistically competitive firm:

A) produces where marginal revenue equals marginal cost and charges the price consumers are willing to pay as given by the demand curve.

B) produces where marginal cost equals average total cost and charges the price consumers are willing to pay as given by the demand curve.

C) chooses price and quantity based on where the marginal cost curve meets the demand curve.

D) chooses price and quantity based on where the average total cost curve meets the demand curve.

21) Oligopoly is A) like a monopoly because there are barriers to entry. B) like perfect competition because oligopoly firms all sell homogeneous goods. C) like monopolistic competition because oligopoly firms all sell differentiated goods D) like perfect competition because there are many firms in the industry
ECON 1102 (Microeconomics) Test 4 (043015)

In ________ market structure, a firm's output depends ________.

A) an oligopoly; only on its own marginal revenue and marginal cost curves

B) a monopolistically competitive; in part on its competitors' price and quantity decisions

C) an oligopoly; in part on its competitors' price and quantity decisions

D) a monopolistically competitive; only on its marginal revenue curve

1) A natural monopoly exists when:

a. A few firms collude to make one large firm

b. Firms enter the industry as a result of profit incentives

c. Economies of scale provide large cost advantages to having one firm produce the industry's output

d. Firms naturally maximize regardless of market structure

2) A(n) ____ is a single firm with ___, whereas a(n) ___ implies an industry with ____ firm(s) and ____ .

a. Monopoly; barriers to entry; oligopoly; few; no barriers to entry

b. Oligopoly; no barriers to entry; monopoly; many; easy entry and exit

c. Monopoly; barriers to entry; monopolistic competition; many; easy entry and exit

d. Monopolistic competitor; barriers to entry; monopoly; one; barriers to entry

3) In monopolistic competition:

a. Each firm produces a product identical to that of every other firm in the industry

b. Firms are aware of their strategic interdependence

c. Firms earn large economic profits in the long run

d. Firms earn zero economic profits in the long run

4) A monopolistically competitive industry, such as corn snack chips, and a perfectly competitive industry, like wheat farming, are alike in that:

a. There are many firms in each industry

b. Firms in both types of industries produce similar but not identical products

c. Barriers to entry in both industries are large

d. Firms in both types of industries produce identical products

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EC 201 Lecture Notes - Lecture 13: Oligopoly, Marginal Revenue, Marginal Cost

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