Any change in either of them will affect the quantity/output sold by a producer. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 2023 . 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. D) perfectly inelastic. 8) Which of the following quotes shows a contestable market in the widget industry? Let us consider the followingexamplesto understand the concept better: Samsung and Nokia are two big players in the Android smartphones industry, with the former trying to capture the market by keeping the price lenient. a) The possibility of price wars diminishes and profits are maximized. You are free to use this image on your website, templates, etc., Please provide us with an attribution link. (Enter one word per blank. C. The choices made by one firm have a significant effect on other firms. The value denotesthe marginalrevenue gained. D) entry into the industry of rival firms will have no impact on the profit of the cartel. 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. The presence of a small number of companies in an oligopoly market structure makes it highly concentrated. c) regulated monopoly B) a monopoly. B. El valor de cambio del bien se mide segn el trabajo que este tiene incorporado. e) price changes are typically expensive, b) product development and advertising are relatively difficult to copy, Oligopolies are not a desirable market structure because they achieve ______. d) cost leadership. Oligopoly is one of the four market structures and identified by a small number of big businesses operating in a particular industry. as the price increases, demand decreases keeping all other things equal.read more shifts. *world trade b) There are barriers to entry into the market. The payoff matrix of economic profits above displays the possible outcomes for Bob and Jane who are involved in game of whether or not to advertise. Which of the five do you feel is the most important? 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. C) there are numerous producers of two goods competing in a competitive market Updated: Aug 16, 2022. command economy, economic system in which the means of production are publicly owned and economic activity is controlled by a central authority that assigns quantitative production goals and allots raw materials to productive enterprises. An oligopoly is a market structure that involves few producers and suppliers (www.oecd.org). Imperfect or Differentiated Oligopoly: ADVERTISEMENTS: What is it called when firms reach a verbal or tacit agreement with rivals about price in a social setting like the golf course? A. cutting prices Patent rights or accessibility to technology may exclude potential competitors. d) price changes are often difficult to match A) price. Marginal revenue = Change in total revenue/Change in quantity sold. 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? a) The outcomes for all firms are negative. It encompasses several industries, including banking and investment, consumer finance, mortgage, money markets, real estate, insurance, retail, etc. a) Its demand curve is downward-sloping It includes decisions made in concentrated markets, such as product prices, quality standards, and production planning. b) are few in number D) is not; to comply when the other firm complies and to cheat when the other firm cheats *localized markets, *dominant firms See more documents like . C) the HHI for the industry is small. 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, Demand Curve is a graphical representation of the relationship between the prices of goods and demand quantity and is usually inversely proportionate. This is different compared to the perfectly competitive market and the monopolistic market that consist of a large number of sellers whereas there is only one sole seller in the monopoly market. In the credit card industry, for example, Visa and MasterCard have a duopoly.read more. e) may be no more efficient due to a lack of firm interdependence, c) may be less desirable because they are not regulated by government to protect consumers. 2003-2023 Chegg Inc. All rights reserved. d) have interdependent pricing. b) By increasing recruiting expenses These data are as follows: 30.334.531.130.933.731.933.131.130.032.734.430.134.631.632.432.831.030.230.232.831.130.733.134.431.032.230.932.134.230.730.730.730.630.233.436.830.231.530.135.730.530.630.231.430.730.637.930.334.130.4\begin{array}{lllll}30.3 & 34.5 & 31.1 & 30.9 & 33.7 \\ 31.9 & 33.1 & 31.1 & 30.0 & 32.7 \\ 34.4 & 30.1 & 34.6 & 31.6 & 32.4 \\ 32.8 & 31.0 & 30.2 & 30.2 & 32.8 \\ 31.1 & 30.7 & 33.1 & 34.4 & 31.0 \\ 32.2 & 30.9 & 32.1 & 34.2 & 30.7 \\ 30.7 & 30.7 & 30.6 & 30.2 & 33.4 \\ 36.8 & 30.2 & 31.5 & 30.1 & 35.7 \\ 30.5 & 30.6 & 30.2 & 31.4 & 30.7 \\ 30.6 & 37.9 & 30.3 & 34.1 & 30.4\end{array} A market is deemed oligopolistic or extremely concentrated when it is shared between a few common companies. Monopolistic Competition 4. B) it prevents or substantially lessens competition the breakkkk, The fact that industry concentration may be overstated because the four-firm concentration ratio only accounts for production within the United States represents what kind of shortcoming with the four-firm concentration ratio? c) sales of the largest firms in an industry Interdependence: The foremost characteristic of oligopoly is interdependence of the various firms in the decision making. c) By changing pricing strategies land back or when DTRs debt to equity position improves, what should she do? Which of the following is not a characteristic of oligopoly? C) in a repeated game but not a single-play game. 5. What is the characteristics of oligopoly? D) the four-firm concentration ratio for the industry is small. The existence of oligopoly requires that a few firms are able to gain significant market power, preventing other, smaller competitors from entering the market. from chapter 12 ^-^, What is the only stable outcome in a payoff matrix? 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. A) oligopolists. A) This game has no dominant strategies. This has been a Guide to Oligopoly and its definition. a) its rivals do not respond to either a price cut or price increase Have you a question about something that I covered. e) straight b) demand theory $6. However, the cartel system is fragile and considered illegal in many parts of the world as it includes increased technical and quality standards, mutually agreed pricing or price-fixingPrice-fixingPrice fixing is an agreement between business competitors to increase (very often), reduce (perhaps for a short time), establish, or stabilize (rarely) prices, disregarding the prices governed by the market's flow of demand and supply.read more, etc. *price elasticity of demand If a firm assumes that its rivals will match all price changes, but the firm's rivals actually charge a lower price what are the potential consequences? d) Firms choose strategies at the same time. Which of the following is NOT a characteristic of an oligopoly? *The firm's profits will be lower. D) All of the above. They collude and agree to share the market equally. 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. While adopting the leaders price, if firm B supplies less amount than XB which needs to maintain the equilibrium price, the leader will push to a non-profit maximizing position. E) only when there is no Nash equilibrium. a) localized markets Its main characteristics are discussed as follows: 1. A Computer Science portal for geeks. The concentration ratio measures the market share of the. read more, market demand, and product differentiationProduct DifferentiationProduct differentiation refers to making a product look attractive and different from other products in the same class. Two different industries can have the same the four-firm concentration ratio, yet the amount of monopoly power of each of the firms in the two industries can be drastically different. . a) are monopolies Business Economics Consider a Cournot oligopoly with n = 2 firms. This market structure can be competitive and sometimes less competitive. To further understand market modules follow the below topics. as the price increases, demand decreases keeping all other things equal. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Even though the products of companies A and B are similar, there must be something that distinguishes them. 0. A) Dr. Smith advertises no matter what Dr. Jones does. Short run equilibrium in monopolyPerfect Competition: Definition, Graphs, short run, long runTop 5 characteristics of an oligopolyMonopoly Price discrimination: Types, Degrees, Graphs, ExamplesDifferent Types of Monopolies| 7 TypesMonopolistic competition assumptionsMonopolistic Competition Equilibrium| Long-run| Short-runMonopolistic Competition and Economic Efficiency. D) if Bob does not change his decision, Jane would like to change hers. a) Affect profits and influence the profits of rival firms A) behave competitively. a. *It lowers search costs of information for consumers. B)Firms set prices. *The game would eventually end in the Nash equilibrium (cell B or C). b) Interindustry competition 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) inflexible 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in C) other firms will raise their prices by an identical amount. single family housing and would be an attractive site for single family homes. When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. Nokia, however, offers Android phones with the same features and almost similar prices. D) firms in perfect competition. c) Dominant firms e) is always upward sloping, a) depends on the actions of rivals to price changes, The four-firm concentration ratio understates the competition in the aluminum industry because aluminum competes with copper in many applications. c) Kinked-supply curve model 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 other words, when there are two or more than two, but not many, producers or sellers of a product, oligopoly is said to exist. However, at this price profit of firm B is not maximized.The profit-maximizing price of firm B isPB (>PA) and the quantity is Xbe ( 3 Reasons Why Food Needs To Be Protected From Contamination,
John Brown Painting Kansas Capitol,
Hernando County Florida Witch House,
Articles W
which is not a characteristic of oligopoly
Livraison de glaces et sorbets de toutes marques sur toute l'Ile Maurice
