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25 Jun 2018

1. Which of the following statements about oligopolies is not correct?

a.

Oligopolistic firms always charge the monopoly price.

b.

Oligopolistic firms are interdependent in a way that firms in perfect competition are not.

c.

An oligopolistic market has only a few sellers.

d.

The actions of any one seller can have a large impact on the profits of all other sellers.

2. Which is true of an oligopoly market that reaches a Nash equilibrium?

a.

The firms will not have behaved as profit maximizers.

b.

A firm will have chosen its best strategy, given the strategies chosen by other firms in the market.

c.

A firm will not take into account the strategies of competing firms.

d.

The market price will be different for each firm.

3. In game theory, what is a dominant strategy?

a.

the best strategy for a player to follow, regardless of the what strategies other players use

b.

a strategy that makes every player better off

c.

a strategy that must appear in every game

d.

the best strategy for a player to follow only if other players are cooperative

4. Which of the following situations produces the largest profits for oligopolists?

a.

The firms reach a Nash equilibrium.

b.

The firms combine to produce the monopoly output level.

c.

The firms set prices equal to marginal cost.

d.

The firms produce a quantity of output that lies between the competitive outcome and the monopoly outcome.

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Lelia Lubowitz
Lelia LubowitzLv2
25 Jun 2018
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