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1. Describe the characteristics of an oligopolistic market and explain whether it is socially efficient or inefficient.
2. What are the pros and cons of cost-benefit analysis in evaluating policy options?
3. What is a Herfindahl-Hirschman Index and the Lerner Index? How are the 2 indices related?
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- The Old Familiar and The Beehive are the only two bistros in town. Each is trying to decide whether or not it should advertise in the local newspaper. The accompanying payoff table gives their weekly profits under each possible outcome. The Beehive The Beehive does advertise | does not advertise The Old Familiar The Old Familiar earns $X in profits. earns $3,500 in profits. The Old Familiar does advertise The Beehive The Beehive earns $Y in profits. earns $2,250 in profits. The Old Familiar The Old Familiar earns $2,000 in profits. earns $2,500 in profits. The Old Familiar does not advertise The Beehive The Beehive earns $4,000 in profits. earns $3,500 in profits. a. Which combination or combinations of X and Y would make a situation in which The Old Familiar does not advertise and The Beehive advertises a Nash equilibrium? A Nash equilibrium occurs if2. During your next trip to the supermarket (or you may need to make a special trip) find two examples of different goods for which the market is oligopolistic. Make certain that you have chosen a âgoodâ and not a brand name. Remember that several brand names compete in a market. List all the brand names (or at least four brands if there are dozens) and the parent company for each brand name (check the package carefully so that you donât confuse brand names with the actual producer.) For each good, what is your evidence that this market is oligopolistic? (number of producers; shelf space give to each one; identical pricing.)10:04 PM cb = Chegg Economics Vo LTE expert.chegg.com/expertqna Time remaining: 00:09:49 Consider the following payoff matrix for two oligopolists that are deciding what quantity to produce: Firm 2 High Quantity Low Quantity $70k; $70k $130k; $20k High Quantity Firm 1 $20k; $130k $100k; $100k Low Quantity In the Nash equilibrium of this game, what are the payoffs to each firm? O a. Firm 1 receives $130k and Firm 2 receives $20k. O b. Firm 1 receives $20k and Firm 2 receives $130k. O c. Firm 1 receives $100k and Firm 2 receives $100k. O d. Firm 1 receives $70k and Firm 2 receives $70k. Answer Skip 4G Exit 2 ¹20%
- With the aid of a diagram explain on oligopolistic kinked demand curve.Q7 An oligopolistic market structure is beneficial to society because... a. Oligopolistic firms compete through innovation, which is a driving force of economic growth and increasing living standards. b. Oligopolistic firms are able to exploit all existing economies of scale and operate at the minimum of long-run average costs, and thereby reduce the use of society's resources. c. Oligopolistic firms compete through advertising, which increases economic efficiency. d. An oligopolistic market structure is most adaptive to today's rapid rate of technological change. e. An oligopolistic market structure is most conducive to non-competitive behaviour, which leads to lower prices for consumers in the long run.1) Define Cartel and give an example. 2) Thelma and Louise are being charged for a murder/robbery. They are separated by police and interrogated. They are given the choice to confess or not to confess. The payoff matrix below identifies the years that they will each spend in jail, for the various outcomes. Louise Confess Don't Confess Confess (2 10,10 15.2 Thelma Don't Confess 2,15 3,3 a. Identify the Dominant Strategy for either player, or state that there isn't one. Remember, a "Strategy" is the players move. In this example, state "Confess" or "Don't Confess" for each player, not the payoff. b. Identify the Nash Equilibrium.
- Calculate the Herfindahl index for a duopoly market where each firm has equal market. Calculate the Herfindahl index for a three-firm oligopoly market in which one firm hasa 80% market share and the other firms each have 10% market share. iii. Calculate the Herfindahl index for a 10-firm oligopoly in which each firm has equal market shares. iv. Which of the above markets is the least competitive? Justify your position.RAGERIAL ECO X Question 3 Chapter 17 & 19 P X 13.1 Objectives and Methods of X a the more elastic the demand for x + https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl... A to 9 ( & 19 Problems Saved Help Save & Exit In an oligopolistic market, Multiple Choice the smaller the number of firms and the more elastic the demand, the greater the markup. the larger the number of firms and the more elastic the demand, the greater the markup. the larger the number of firms and the less elastic the demand, the greater the markup. the smaller the number of firms and the less elastic the demand, the greater the markup. Submit g 53Should competitors work together in an oligopolistic market?what is it called if they do,and is it legal?
- Explain the general meaning of the profit payoff matrix below for oligopolists X and Y. All profit figures are in thousands. a. Use the payoff matrix to explain the mutual interdependence that characterizes oligopolistic industries. b. Assuming no collusion between X and Y, what is the likely pricing outcome? c. In view of your answer to 3b, explain why price collusion is mutually profitable. Why might there be a temptation to cheat on the collusive agreement?True/False 1. When oligopolists collude and form a cartel, the outcome in the market is similar to that generated by a perfectly competitive market. 2. Cooperation is easily maintained in an oligopoly because cooperation maximizes each individual firm's profits. 3. If a prisoners' dilemma game is repeated, the participants are more likely to independently maximize their profits and reach a Nash equilibrium.7. Solving for dominant strategies and the Nash equilibrium Suppose Gabriel and Nia are playing a game that requires both to simultaneously choose an action: Up or Down. The payoff matrix that follows shows the earnings of each person as a function of both of their choices. For example, the upper-right cell shows that if Gabriel chooses Up and Nia chooses Down, Gabriel will receive a payoff of 6 and Nia will receive a payoff of 4. Gabriel Up Down Up 6,3 3,3 Nia Down 6, 4 7,4 In this game, the only dominant strategy is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Gabriel chooses and Nia chooses