How does a commitment to match any price cuts by other firms work to limit price competition in an oligopoly? Select one: O a. Firms that cut price get no benefit in increased market share. O b. Demand decreases as consumers anticipate a price war in the future. O. Government regulators step in to avoid a ruinous price war. O d. Demand increases as consumers look more favorably on this industry and its products.

How does a commitment to match any price cuts by other firms work to limit price competition in an oligopoly? Select one: O a. Firms that cut price get no benefit in increased market share. O b. Demand decreases as consumers anticipate a price war in the future. O. Government regulators step in to avoid a ruinous price war. O d. Demand increases as consumers look more favorably on this industry and its products.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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All of the following statements, except one, are correct concerning the cartel variant of oligopoly theory. Which is the exception? O a O b Oc d O e An effective cartel restricts the supply of the product being sold. The individual members of the cartel must agree to and respect quotas on their output. The primary threat to the success of a cartel is government regulation. The output and the price of the cartel is often similar to that of a monopoly. The government is a part of the cartel.
QUESTION 13 The short term is a period of time: O of one year or less where a firm can finish one project and start on another is a period of time where all inputs become variable where the firm makes its greatest profit QUESTION 14 Which market structure has a few firms that dominate the entire market? Perfectly competitive Oligopoly Monopolistic competition O Limited Market Structure QUESTION 15 An implicit cost is another name for a(n): Explicit cost Production cost Economic cost Opportunity cost
DeBeers was able to profit the most from the diamond market by selling: a lot of diamonds at high prices. 0000 a lot of diamonds at low prices. a few diamonds at low prices. few diamonds at high prices. Show Transcribed Text An oligopoly with two firms is known as: a two-opoly. a double market. 000 a duopoly. duopolistic competition. Show Transcribed Text 3 C A company with a strong brand identity: can perpetuate false perceptions of quality or product differences. conveys to customers an implicit guarantee of a product's quality. promises consistency to customers. All of these statements are true.
A cartel can be sustained in the long run A. if the long-run market supply curve is inelastic. B. as long as firms can easily exit the market. C. as long as firms don't price discriminate to help produce more output. D. if cartelized firms can be stopped from following their individual incentives to produce more than agreed by the cartel.
6 Company X, Company Y, and Company Z have formed an oligopoly. Company X raises its prices, but Company Y and Company Z do not. Which of the following will likely occur? A Company Y and Company Z will form a duopoly. BO The sales of Company X will decline slightly. CO The sales of Company X will decline sharply. DO Company X will have significant, sustained profit increases.
1. Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is either similar or identical products. Which of the following are other characteristics of this market structure? Check all that apply. O Difficult entry O Market control by a few large firms O Neither mutual interdependence nor mutual dependence O Mutual interdependence O Market control by many small firms
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16 When does a kinked demand curve occur? When one firm in a duopoly cuts prices and forces the exit of the other firm BO When competing oligopoly firms agree to increase prices at the same time and rate CO When competing oligopoly firms commit to match price cuts but not price increases DO When a natural monopoly raises its prices and provides an opportunity for market entry
14. Aside from advertising, how can monopolisticallycompetitive firms increase demand for their products? 17. Would you expect the kinked demand curve to bemore extreme (like a right angle) or less extreme (like anormal demand curve) if each firm in the cartel producesa near-identical product like OPEC and petroleum?What if each firm produces a somewhat differentproduct? Explain your reasoning.
The theory of monopolistic competition explains economic behaviour in industries in which there are O A. a few small firms, each with some market power. O B. many small firms, each with some market power. O C. many small firms, each with no market power. O D. a few small firms, each with no market power. O E. None of the above.
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