which is not a characteristic of oligopoly

c) losses; prices; increase, What is it called when a group of producers creates a formal written agreement stating the level of output by each firm and the prices that must be charged? Marginal revenue = Change in total revenue/Change in quantity sold. c) sales of the largest firms in an industry *The game would temporarily move to either cell B or cell C. a. Though, it is rare to find pure oligopoly situation, yet, cement, steel, aluminum and chemicals producing industries approach pure oligopoly. A type of implicit understanding used by oligopolists to coordinate prices without engaging in outright collusion is known as ______. Also, they rely on free-market forces to earn higher profits than a competitive market. d) Cost leadership model E) entry into the industry of rival firms will raise cartel profit as long as the new firms join the cartel. 7) The kinked demand curve theory of oligopoly predicts that That means higher the price, lower the demand. What is it called when firms reach a verbal or tacit agreement with rivals about price in a social setting like the golf course? The core competencies in business refer to its resources and unique fundamental capabilities that distinguish it from market competitors. 11) Which one of the following quotations best describes a dominant firm oligopoly? a) The kinked-demand curve model Answers: 1 Show answers Another question on Social Studies. Over a long time period, cheating ______ collusive oligopolies c) it will prevent a price war D) its profit will rise by the same percentage. Companies often merge to ______ monopoly power. 5.3.5 Apply Concepts of Oligopoly and Oligopoly Models .pdf. D) Gear cheats, while Trick complies with the agreement. b) Affect profits without influencing the profits of rival firms 10) In the dominant firm model of oligopoly, the dominant firm produces the quantity at which marginal revenue equals c) less than or equal to 40% (Figure) summarizes the characteristics of each of these market structures. d) Interindustry competition, Which are barriers to entry in both monopolies and oligopolies? CFA And Chartered Financial Analyst Are Registered Trademarks Owned By CFA Institute. c) is always downward sloping a) Cartel d) Its marginal revenue curve would consist of two segments A) "Gas prices in this town always go up and down together." E) None of the above. Which is the simple form of oligopoly market? *To obtain lower input prices d) lowering the cost of production A) kinked demand curve. Thus, the land is worth However, firm B follows the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. Is Microsoft an oligopoly Do you want to know Click Here. D) is not; to comply when the other firm complies and to cheat when the other firm cheats a) price leadership C) independence of firms. C) Dr. Smith advertises only if Dr. Jones doesn't advertise. bc it's similar to monopoly but has the difference of having more firms lol. 1. C) Firms in the cartel will want to raise the price. B) both firms comply with the agreement. Why is collusion desirable to oligopolistic firms? D) firms in perfect competition. c) They achieve allocative efficiency because they produce at minimum average total cost. a) There are a few large firms that make up the industry. a. A 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. Prisoners' dilemma describes a case where Perfect competition is a market in which there are a large number of buyers and sellers, all of whom initiate the buying and selling mechanism. D) patents, copyrights, barriers to entry, and rules. 18) A market with a single firm but no barriers to entry is known as b) greater than or equal to 50% 6) Which one of the following characteristics applies to oligopolistic markets? 2) In the dominant firm model of oligopoly, the larger firm acts like Monopolistic Competition 4. c) price leadership; cartel d) does not influence. East Asian regimes tend to have similar characteristics First they are orien. Here, they focus on each other and try to exceed customer expectations in every possible way. Greater the number of firms, the higher the degree of interdependence. D) entry into the industry of rival firms will have no impact on the profit of the cartel. Oligopolists offer comparable products or services, so they control prices rather than the market. b) Localized markets *To increase economies of scale, *To increase market share All firms stick to what has been decided, thereby ensuring price stability in the sector. These firms are large enough that their quantity influences the price and so impacts their rivals. a market structure characterized by a small number of interdependent sellers is called a oligopoly Which of the following is NOT a common characteristic of oligopoly? However, DTR does not intend to build any single family homes. c) conveying information to consumers *It lowers search costs of information for consumers. Some of its fundamental characteristics include the existence of a small number of firms, differentiated or homogeneous products, and barriers to entry. e) Price leadership model, a) Kinked-demand curve model 0. E) specify what happens if costs change. Firms are profit-maximizers. Market players in an oligopolistic market focus on non-price competition, ensure their brands are uniquely identifiable and apply hidden advertising tactics. It determines the law of demand i.e. *increasing economies of scale, *providing misleading information Oligopoly is an important form of imperfect competition. C) perfectly elastic. ADVERTISEMENTS: This fact is recognized by all the firms in an oligopolistic industry. C) the firms keep profits and prices so low that no rivals are . c) Firms' advertising decisions are interdependent. E) Dr. Smith does not advertise if Dr. Jones advertises. True or false: Firms in an oligopoly always produce a homogeneous product. Oligopoly is a market with a few firms and in which a market is highly concentrated. d) their profits and sales will rise. They are 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} Oligopoly is one of the four market structures and identified by a small number of big businesses operating in a particular industry. b) are few in number a) its rivals collude a) Affect profits and influence the profits of rival firms Characteristics of an oligopoly The market has been shared equally by firms A and B The cost of firm A is lower than firm B Profit maximizing the output of firms A is XA and the price is PA Firm B adopts this price and sells XB (=XA) amount. In short,AI oligopoly is all set to shape the market, comprising a few large AI service providers dominating and influencing others in the business. 16) A monopolistically competitive firm is like an oligopolistic firm insofar as A) both face perfectly elastic demand. For example, when a government grants a patent for an invention to one firm, it may create a monopoly. 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. d) ow to receive a payout of $12 But in practice, there are several barriers to entre which make it quite difficult for the new firms to join the industry or market. Four characteristics of an . c) game theory The value denotesthe marginalrevenue gained. It encompasses several industries, including banking and investment, consumer finance, mortgage, money markets, real estate, insurance, retail, etc.read more is in progress, the automobile industry has already introduced AI-powered self-driving cars. b) collusion B) is not; to comply when the other firm cheats and to cheat when the other firm complies The amount of time (in seconds) needed to complete a critical task on an assembly line was measured for a sample of 50 assemblies. While it is true that strategic behavior and mutual interdependence characterize oligopolies, this is not the reason why they are price makers. a) kinked and steep In the scenario above, the market is. C) lower the price of their products. B) interdependence of firms. The concentration ratio measures the market share of the. Marilyn Cox is the office manager for DTR Inc. DTR constructs, owns, and manages apartment c) The supply curve model A situation where firms meet to fix prices, divide markets, or restrict competition is called ______. d) independently, The shape of the demand curve for an oligopolistic firm ______. 4. Which of the following statements correctly describes Dr. Smith's strategy given what Dr. Jones may do? c) high to receive a payout of $12 a) gentleman's agreement As a result, the implementation of the policy has been marginalizing the rural settled peasant . Even though the products of companies A and B are similar, there must be something that distinguishes them. 1) A cartel is a group of firms which agree to A) behave competitively. b) OPEC 36) Refer to Table 15.3.10. C)The sales of one firm will not have a significant effect on other firms. 7) Why might only a few firms dominate an oligopolistic industry? This represents what kind of problem with the four-firm concentration ratio? 13) A dominant firm oligopoly might be one for which the Herfindahl-Hirschman Index is 6) According to the kinked demand curve theory of oligopoly, at the quantity corresponding to the kink, the firm's It is assumed that all of the sellers sellidentical or homogenous products.read more, monopoly, and monopolistic competition. 6. All right then. C. Some market power. Consequently, the sales of the other firm will be definitely reduced by the same percentage. If the products of the firms are differentiated the degree of interdependence is then weakened. 31) Refer to Table 15.3.7. Advertising benefits society by ______. . The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. D) in neither a repeated game nor a single-play game. b) Its demand curve is downward-sloping Which of the following represents the problem with the four-firm concentration ratio? The four-firm concentration ratio is based on the ___. About us. Pure because the only source of market power is lack of competition. The equilibrium ________ a dominant strategy equilibrium because the strategy in this game is for a firm ________. D) zero. So here we can see a one-way interdependence pattern. C) strategies D) marginal revenue curve is discontinuous. b) It will always be downward sloping because it is a price maker. B) a monopoly. Oligopoly is said to prevail when there are few firms or sellers in the market producing or selling a product. It thus limits the competition to only those already in the group. D) assumes that competitors will match price cuts and ignore price increases. A) in a single-play game or a repeated game. Mutual interdependence among the firms in decision making is the essential feature of the oligopolistic market. Sweezy Oligopoly - based on a very specific assumption regarding how other firms will respond to price increases and price cuts. Which of the following is not a characteristic of oligopoly? 4) According to the kinked demand curve theory of oligopoly, each firm thinks that demand just below the price at the kink is A) less elastic than the demand just above the price at the kink. The demand curve will look kinked to reflect the fact that rivals will match price *decreases* but ignore price *increases*. c) dominant firms a) productive efficiency but not allocative efficiency 0. This way, Samsung and Nokia ensure non-price competition by enhancing core capabilities to build a loyal customer base. Non-Collusive Oligopoly-Sweezy's Kinked Demand Curve Model (Price-Rigidity) Usually, in Oligopolistic markets, there are many price rigidities. a) Import competition b) are few in number 11) Once a cartel determines the profit-maximizing price, *dominant firms c) It will always be kinked because it is a price maker. B) Firms are profit-maximizers.C) The sales of one firm will not have a significant effect on other firms. 1) All games share four common features. When members of an oligopoly react to price changes by a ____ _____ dominant firm, the model is most applicable. A) a natural monopoly. What is oligopoly and its characteristics? a) collusion; cartel B)Firms set prices. b) high to receive a payout of $15 Your email address will not be published. As a result, monopolists produce less, at a higher average cost, and charge a higher price than would a combination of firms in a perfectly competitive industry. *Ownership and control of raw materials a) increasing firm profits B) total revenue. An oligopoly is an industry dominated by a few large firms. d) straight and steep 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. a) Its demand curve is downward-sloping E) the firms are interdependent. What kind of game is it when firms choose their optimal pricing strategy today without worrying about possible interactions in the future? E) none of the above. Based on the figure, if RareAir honors an agreement with Uptown to price high, and Uptown needs to increase profits due to stockholder pressure, Uptown will price ______. A) "Gas prices in this town always go up and down together." 9) In the dominant firm model of oligopoly, the dominant firm faces a Mutual interdependence solely means that they base their decisions on how they think their rivals will react. complexes. 5) According to the kinked demand curve theory of oligopoly, each firm believes that if it raises its price, Which of the following is not a characteristic of an oligopoly? Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. What are the 4 characteristics of oligopoly? 3) Which one the following industries is the best example of an oligopoly? If one firm is large enough to account, which is that 80% of sales in the industry. The distinctive feature of an oligopoly is interdependence. *It helps reduce demand for material products. C) Trick cheats, while Gear complies with the agreement. Firm A and Firm B are the only producers of soap powder. EconTips 2022 - All Right Reserved, Designed and Developed by Harshasoft, Perfect Competition: Definition, Graphs, short run, long run, Monopoly Price discrimination: Types, Degrees, Graphs, Examples, Monopolistic Competition Equilibrium| Long-run| Short-run. *Patents, *Preemptive pricing B) potential entrants entering and incurring economic loss. Keep its price constant and thus decrease its market share C. Increase its price and thus increase its market share D. Decrease its price and thus decrease its market share d) achieve greater allocative efficiency but lesser productive efficiency, c) give the appearance of increased competition Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. They do so through collusion that results in higher prices and fewer production or product choices for customers. a) By decreasing total suppliers Marginal costMarginal CostMarginal 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. *Prohibit the entry of new rivals. Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. Product differentiation refers to making a product look attractive and different from other products in the same class. 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. 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 _____. Oligopoly refers to a market situation or a type of market organisational in which a few firms control the supply of a commodity. The firms in the oligopolistic market are having full knowledge about the market particularly about their rival firms. An oligopoly (from Greek , oligos "few" and , polein "to sell") is a market form wherein a market or industry is dominated by a small group of large sellers (oligopolists). b) By increasing recruiting expenses a) L-shaped *Diseconomies of scale E) an oligopoly. *localized markets, Barriers to entry into an oligopoly most resemble those of a ______. c) Dominant firms *To increase control over the product's price There are just several sellers who control all or most of the sales in the industry. B) marginal cost curve is discontinuous. B) assumes marginal cost is constant. If this occurs, then the firm's demand curve will look ______. Demand and cost differences, the number of firms in the industry, and the potential for cheating all represent _____ (one word) to collusion. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Copyright 2023 . A firm in an oligopolistic market ______. D) 2,750. In a monopoly, only one big brand influences the entire market without any competition. B) neither player would be willing to change his or her decision unless the other player also changes his or her decision. D) the four-firm concentration ratio for the industry is small. *providing misleading information O B. 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. *The game would eventually end in the Nash equilibrium (cell A). e) increasing search time. C) a perfectly competitive market. Oligopolies are typically composed of a few large firms. 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. The point at which an upward-sloping marginal cost curve intersects a downward-sloping marginal revenueMarginal RevenueThe marginal revenue formula computesthe change in total revenue with more goods and units sold." The number of suppliers in a market defines the market structure. b) u-shaped 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. The presidents friend constructs and sells single family homes. Which statement is true about oligopolies? a) Firms have no control over their price. Monopolists are not allocatively efficient, because they do not produce at the quantity where P = MC. 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. Have you a question about something that I covered. Based on the elasticity of demand and its response to the price change, the demand curveDemand CurveDemand Curve is a graphical representation of the relationship between the prices of goods and demand quantity and is usually inversely proportionate. In this market, there are a few firms which sell homogeneous or differentiated products. found that the most prevalent disorder was b) neither productive efficiency nor allocative efficiency The firms produce differentiated products. b) Demand is highly elastic below the going price $15. E)Firms are profit -maximizers. D. Th; Which of the following is a characteristic of an oligopoly market structure? b) They achieve productive efficiency because their marginal revenue equals marginal cost. d) price leadership; kinked-demand, From society's standpoint, what are the effects of collusion in an oligopolistic industry? C) the same as a monopoly. As in an oligopoly market, the decision of one firm influences the process and working of another firm. c) Nash equilibrium An oligopolistic firm's marginal revenue curve is made up of two segments if ______. Economies of scale are the cost advantage a business achieves due to large-scale production and higher efficiency. d) By updating manufacturing equipment, What is the four-firm concentration ratio? What would have been DTRs debt to equity ratio if the$10 million of stock had not been Question: Which of the following is NOT a characteristic of an oligopoly? d) import competition, Suppose the rivals of an oligopolistic firm match either a price increase or decrease. What are the 4 characteristics of oligopoly? The payoffs in the table are the economic profit made by Bud and Miller. d) strategic theory. b) The number of employees in an industry who ever have or are currently working for one of the four largest firms Barriers to entry into an oligopoly most resemble those of a ______. 5) Which one of the following characteristics applies to oligopolistic markets? D)There is more than one firm in the industry. *The game would eventually end in the Nash equilibrium (cell A). c) may be less desirable because they are not regulated by government to protect consumers This market structure can be competitive and sometimes less competitive. *Large capital investment The distinguishing characteristics of oligopoly are briefly explained below: 1. d) The advertising model, To reduce uncertainty or increase profits, oligopolists may change their prices ______. d) Dominant firms, What are oligopolists able to do by controlling price through collusion? After each player chooses his or her best strategy and sees the result, B) raise the price of their products. Oligopoly. But the other firms act considering the interdependence. Instead, they collaborate on various fronts, such as economies of scaleEconomies Of ScaleEconomies of scale are the cost advantage a business achieves due to large-scale production and higher efficiency. A game that is played more than once between rivals is a ____ (Enter one word) game. To further understand market modules follow the below topics. 3) Canada's anti-combine law is enforced by c) kinked d) its rivals match price decreases but ignore price increases, d) its rivals match price decreases but ignore price increases, Which of the following is true about the oligopolist if rivals match a price cut but ignore a price increase? Determinants of Price Elasticity of Supply. While AI integration in the medical, legal, and financial sectorsFinancial SectorsThe financial sector refers to businesses, firms, banks, and institutions providing financial services and supporting the economy. *localized markets, *dominant firms The most important model of oligopoly is the Cournot model or the model of quantity competition. *To increase economies of scale. *Cause price wars during business recessions C) in a repeated game but not a single-play game. 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 *Preemptive pricing A market is considered to be a(n) ______ when the largest four firms in an industry control more than 40% or more of the market. c) An outcome in the payoff matrix from which neither firm wants to deviate since the current strategy is optimal given the rival's strategic choice. E) All of the above. *world trade The more concentrated a market is, the more likely it is to be oligopolistic. D) increase the amount they produce. Also, as there are few sellers in the market, every seller influences the behavior of the other firms and other firms influence it. 6) Wal-Mart follows the kinked demand curve model of oligopoly. A. What does a demand curve look like for an oligopolistic firm? e) straight. They do it strategically so they do not lose their customers in what could be a price war. E) none of the above. 8) 8)Which is not a characteristic of oligopoly? In other words, Therefore, within the oligopoly market the "ordinary" producers must have careful preparation to follow the changes in a policy coming from the main producers. Oligopoly. (Pure) Monopoly 3. It is an essential component of marketing strategy leading to brand recognition and business growth. 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. C) perfectly elastic demand. Which of the following is not a characteristic of oligopoly? It determines the law of demand i.e. E) a market with two distinct products. b) Firms may sell a homogeneous product. attempts to raise $425 million to use to build apartments in a growing area of Tulsa. The first firm to move in a sequential game has an advantage by establishing a ____ _____ that is favorable to them. *To decrease monopoly power 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? A) a market where three dominant firms collude to decide the profit-maximizing price. 21) It is difficult to maintain a cartel for a long period of time. For example, it has been found out that insulin and the electrical industry are highly oligopolist in the US. b) are less efficient because they are often regulated by the government Which of the following is not a characteristic of an oligopoly? D) monopolistic competition. c) give the appearance of increased competition It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. Production Cost is the total capital amount that a Company spends in producing finished goods or offering specific services. d. 2. . c) inflexible In third-degree price discrimination happens when customers are segregated by . *price elasticity of demand they set up a 1 meter (100 cm) track. An oligopoly is an industry dominated by a few large firms (Few sellers supplying, many buyers). Meanwhile, all firms know that their decisions affect other firms sales and profit, hence they necessarily react against those decisions. from chapter 12 ^-^, What is the only stable outcome in a payoff matrix? B) revenues, elasticity, profit, and payoffs. C) the HHI for the industry is small. A characteristic found only in oligopolies is A) break even level of profits. C) one prisoner has no chance to be acquitted since there is no other prisoner to support his testimony.

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