30.331.934.432.831.132.230.736.830.530.634.533.130.131.030.730.930.730.230.637.931.131.134.630.233.132.130.631.530.230.330.930.031.630.234.434.230.230.131.434.133.732.732.432.831.030.733.435.730.730.4. C) Miller has a dominant strategy but Bud does not. As a result, each firm obligates to adhere to pre-determined price and quantity/output levels to maximize revenue. As a result, both brands consistently work on the design, user interface, camera, and other aspects of their smartphones to make sure customers stick to their brand. D) unit elastic demand. In December, General Motors produced 6,600 customized vans at its plant in Detroit. B) both prisoners deny. A) is; all other firms act as if they are perfectly competitive B) is not; other firms can enter, which increases supply, decreases the price, and drives economic profit down to zero *To obtain lower input prices Because of this, every firm takes decisions very carefully by considering the possible reactions of the rival firms. e) Its marginal cost curve is made up of two segments, d) Its marginal revenue curve would consist of two segments. a) inelastic a) low to receive a payout of $15 The distinctive feature of an oligopoly is interdependence. It is assumed that all of the sellers sellidentical or homogenous products.read more, monopoly, and monopolistic competition. E) None of the above. A) specify the technology of production. d) It will always be U-shaped. D) entry into the industry of rival firms will have no impact on the profit of the cartel. Here we discuss how does Oligopoly market work in economics along with its characteristics. *To increase control over the product's price A) costs, prices, profit, and strategies. Which of the following is not a characteristic of oligopoly? Characteristics and Features of Oligopoly (6 Answers) B) neither player would be willing to change his or her decision unless the other player also changes his or her decision. D) payoffs Since there are few dominating firms which are having full knowledge about the market, the decisions on the price and output of a firm depend on the reactions of other firms. *Patents, *Preemptive pricing B) the courts. As their products seem visually identical, both the brands have to make sure they offer customers something that the other does not. b) It will always be downward sloping because it is a price maker. B) Dr. Smith does not advertise no matter what Dr. Jones does. c) price leadership; cartel E) is; to comply when the other firm cheats and to cheat when the other firm complies. *Increase profits A Computer Science portal for geeks. The total market demand is P(Q) = 50 - 2Q, where Q is the total quantity produced by all (active) firms in the industry. b) its rivals match a price cut but ignore a price increase C) The sales of one firm will not have a significant effect on other firms. *Reduce uncertainty c) It will always be kinked because it is a price maker. The most important model of oligopoly is the Cournot model or the model of quantity competition. E) a competitive market produces two goods. d) Firms choose strategies at the same time. Mutual interdependence solely means that they base their decisions on how they think their rivals will react. C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." *Large capital investment East Asian regimes tend to have similar characteristics First they are orien. The characteristics of oligopoly include interdependence, product differentiation, high barriers to entry, uncertainty, price setters. c) it will prevent a price war The four-firm concentration ratio is based on the ___. A) suggests that price will remain constant even with fluctuations in demand. An oligopoly is a market structure where a few large firms collude and dominate a particular market segment. A study based on over 9,0009,0009,000 U. S. residents c) harder About us. A) price. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. A) is; to comply regardless of the other firm's choice An oligopoly is an industry dominated by a few large firms (Few sellers supplying, many buyers). Some of its fundamental characteristics include the existence of a small number of firms, differentiated or homogeneous products, and barriers to entry. Why does a rise in the current asset to total asset ratio result in a decline in net working capital's estimate of both profits and risk? d) straight and steep Furthermore, no restrictions apply in such markets, and there is no direct competition. If one of the firms cheats on this agreement, what will happen? PDF Instructor Miller Oligopoly Practice Problems - Des Moines Area Patent rights or accessibility to technology may exclude potential competitors. c) The possibility of price wars increases, but profits are maximized. That means higher the price, lower the demand. 9) Which is not a characteristic of oligopoly? Firm B adopts this price and sells XB(What is Oligopoly: Types, Characteristics and Examples b) Collusive pricing model E)Firms are profit -maximizers. 4) Which one of the following industries is the best example of an oligopoly? c) through collusion Oligopolists do not stress competing with each other on the pricing front. c) They move leftward and upward to a higher point on the average-total-cost curve. The group that colludes is referred to as a cartelCartelA cartel is a group of producers of goods or suppliers of services formed through an agreement amongst themselves to regulate the supply of goods or services with the basic intent to illegally regulate the prices or restrict competition regarding the said goods or services.read more. C) Trick cheats, while Gear complies with the agreement. An oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. d) its rivals match both a price cut and price increase, b) its rivals match a price cut but ignore a price increase, When members of an oligopoly meet to set prices to maximize profits it demonstrates the ______ and/or the ______ model. The factors that determine a market structure include the number of businesses, control over prices, and barriers to market entry. The existence of oligopoly requires that a few firms are able to gain significant market power, preventing other, smaller competitors from entering the market. Share with Email, opens mail client A characteristic found only in oligopolies is A) break even level of profits. D) its profit will rise by the same percentage. E) both are price takers. E) rivalry of the participants leads to the worst solution from their point of view. C. Some market power. A) collusion of the participants leads to the best solution from their point of view. B) "I am producing more widgets than Wally and I agreed to in our talk last week." For an industry to be considered an oligopoly the four-firm concentration ratio must be ______. b. a) An outcome in the payoff matrix from which one firm wants to deviate since the current strategy is not optimal given the rival's strategic choice. Which statement is true about oligopolies? It is one of the four market structures that include perfect competition, monopoly, and monopolistic competition. Select one: O a. there are a few firms that are mutually interdependent O b. when one firm in an oligopoly raises its price, other firms will follow O c. firms may collude in order to act like a monopoly O d. barriers to entry exist to limit the entrance of new firms Oligopolyis a market structure c) horizontal or perfectly elastic a) often The firm and market structures - My Conquest Is the Sea of Stars a) price leadership C) a firm in monopolistic competition. d) The percentage of industries that are dominated by a group of four or fewer firms, c) The percentage of total industry sales accounted for by the four largest firms, What term means "cooperation with rivals?" A game that is played more than once between rivals is a ____ (Enter one word) game. 3) Canada's anti-combine law is enforced by Consequently, the sales of the other firm will be definitely reduced by the same percentage. Which of the following is not a characteristic of an oligopoly? Firms are more likely to cheat on a collusive agreement when the economy is experiencing a _____ (Enter one word). A) rules But in practice, there are several barriers to entre which make it quite difficult for the new firms to join the industry or market. 1. An oligopoly is a market state where there is a limited amount of competition available for consumers to consider. b) price leadership; collusion Cost of firm A is lower than firm B Profit maximizing price and quantity of firm A is PA and XA respectively. D) products that are slightly different. c) allocative efficiency but not productive efficiency For example, when a government grants a patent for an invention to one firm, it may create a monopoly. For a particular industry there may be a low four-firm concentration ratio since it is measured on a nationwide scale, but there can still be a local oligopoly. Price collusion caused by market transparency and other factors enables oligopolists to raise their barriers to market entry for new competitors, such as high capital requirements, legal obligations, and consumer loyalty. d) They do not achieve allocative efficiency because their price exceeds marginal cost. Why do the elements of structure, such as work specialization, formalization, span of control, chain of command, and centralization, have a tendency to change together? The demand curve will look kinked to reflect the fact that rivals will match price *decreases* but ignore price *increases*. 7) Why might only a few firms dominate an oligopolistic industry? What is duopoly and its characteristics? Explained by FAQ Blog *The firm's demand curve will shift further to the left. a) Cartel An oligopolistic market exhibits the followingoligopoly features: It raises barriers for new entrants to enter into the respective sector. c) regulated monopoly Which helps an oligopoly to form within a market? D) the four-firm concentration ratio for the industry is small. 9) If the efficient scale of production only allows three firms to supply a market, the market is a, 10) A cartel is a group of firms that agree to. In a monopoly, only one big brand influences the entire market without any competition. Based on her experience with past negotiations, Marilyn knows that lenders are concerned about DTRs debt to equity *manipulating consumer preferences. In the credit card industry, for example, Visa and MasterCard have a duopoly.read more. A) Strategic Independence c) Firms earn zero economic profits in the long-run. 11) Which one of the following quotations best describes a dominant firm oligopoly? 4. Based on the payoff matrix, if the two firms agreed to both follow national strategies there is an incentive for them to cheat. 18) A market with a single firm but no barriers to entry is known as Why Developing Countries Should Focus on International Trade? D) All of the above. If the products of the firms are differentiated the degree of interdependence is then weakened. Without collusion, if a firm incorrectly assumes that its rivals will charge the same price but its rivals actually charge a lower price, the firm's demand curve will shift to the ____. 8) Firm X is competing in an oligopolistic industry. Advertising can persuade consumers to pay higher prices for products that are well _____ (one word) instead of purchasing unadvertised products with lower prices. d) The market contains a few large producers. An oligopoly in economics refers to a market structure comprising multiple big companies that dominate a particular sector through restrictive trade practices, such as collusion and market sharing. Oligopolies exist and do not attract new rivals because A) of competition. A) equilibrium price and quantity will be sensitive to small cost changes. Despite having the same market share, a smaller number of firms causes oligopolists to get influenced by each others decisions, such as price cuts and increases. $4. It is difficult to enter an oligopoly industry and compete as a small start-up company. After each player chooses his or her best strategy and sees the result, E) A and C. 8) A merger is unlikely to be approved if ________. What is the difference between monopoly and oligopoly? Raised barriers to entry, price-making power, non-price competition, the interdependence of firms, and product differentiation are alloligopoly characteristics. D) Dr. Smith advertises only if Dr. Jones advertises. 11) Because an oligopoly has a small number of firms, A) each firm can act like a monopoly. What are the four characteristics of market structure? And that is what turns out to be the unique selling proposition (USP) of the respective brands in the oligopolistic industry. d) monopolistically competitive market, The study of how one firm reacts to the actions taken by another firm or individual when implementing a strategy is called _____. The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. *Ownership and control of raw materials Production Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. What kind of game is it if the firms must choose their pricing strategies at the same time? C) is; to cheat regardless of the other firm's choice B) monopolists. B) it prevents or substantially lessens competition B) "Every time Sparrow's Donuts has a donut sale, so does Tim Horton's." The distinctive feature of an oligopoly is interdependence. b) Lower prices, but greater output B) a contestable market. Based on the figure, if one firm cheats on the collusive agreement it can increase its payoff by E) other firms will not raise theirs. *Cause price wars during business recessions b) are few in number d) vertical The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. You may also have a look at the following articles , Your email address will not be published. In the scenario above, the market is. C) changes in the output of any member firms will have no impact on the market price. The core competencies in business refer to its resources and unique fundamental capabilities that distinguish it from market competitors. Segn Ricardo no es posible que exista equidad en el mercado debido a que: A. 9) In the dominant firm model of oligopoly, the dominant firm faces a d) their profits and sales will rise. D) marginal revenue curve is discontinuous. a. small number of firms b. has some pricing power c. the firms are interdependent d. the good produced may be unique or not e. low barriers to entry; Which of the following is not a characteristic of an oligopolistic market structure? Nokia, however, offers Android phones with the same features and almost similar prices. And rest of the businesses or minor players follow the same. a) There are a few large firms that make up the industry. E) All of the above. a) localized markets 26) Refer to Table 15.3.4. A small number of sellers. d) By updating manufacturing equipment, What is the four-firm concentration ratio? C) in a repeated game but not a single-play game. B) predict that an increase in price by one firm is accompanied by price increases of other firms if every firm experiences a large enough increase in marginal cost. Marketers highlight the distinguishing features in the product commonly through packaging or a good design, which helps communicate the benefitting factors to the shoppers.read more. d) They do not achieve allocative efficiency because their price exceeds marginal cost. It continues to behave on the assumption that its new demand (d 1 d' 1 ) will not shift further because the effect of its own decisions on other sellers' demand would be negligible. 11) Once a cartel determines the profit-maximizing price, *manipulating consumer preferences Given the emergence and expected evolution of AI-driven services in various niches, it is likely that there will be a highly concentrated market devoted explicitly to the AI needs of consumers. *localized markets, Barriers to entry into an oligopoly most resemble those of a ______. What kind of game is it when firms choose their optimal pricing strategy today without worrying about possible interactions in the future? Marginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. C) "Construction prices in this town seem to be always set by Big Jim's Dandy Construction Company." b) collusion It is used as one of the strategies to increase the business firm's revenue and increase the market share.read more. This has been a Guide to Oligopoly and its definition. A(n) _______ (Enter one word) is a market dominated by a few large producers of a homogeneous or differentiated product.