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What are the behavioral assumptions in oligopoly that lead to an individual oligopolist firm facing a kinked demand curve? What's the key take-away of the kinked oligopoly model?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 2.5P

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2. What are the behavioral assumptions in oligopoly that lead to an individual oligopolist firm facing a kinked demand curve? What's the key take-away of the kinked oligopoly model?

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5. The Key feature of Oligopoly is interdependence – we saw this in both traditional models and using game theory. a. Explain why price can be very rigid for an oligopoly using the “Kinked Demand Model”: b. Explain how an oligopoly can simultaneously take one features seen for a monopoly and for perfect competition using the “Price Leader Model”: c. Describe how the Hirchmann Herfindahl Index (HHI) provides a more acquire measurement of market concentration than a simple Concentration Ratio like CR4: d. What is the actual dilemma in a “Prisoners’ Dilemma” type of game? e. What is the main reason why real-world Cartels have such a hard time function well?
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18. Refer to Figure 18-1. If the shop charges $150 per repair, then what is the value of the marginal product of the second mechanic? 19. Refer to Figure 18-1. What is the marginal product of the third mechanic? 20. Why are the actions of firms interdependent in an oligopoly market but not in a monopolistically competitive market?
what are oligopoly firms? can you identify the main characteristics of firms in an oligopoly market? find the real-life example and explain.
What are the types of the oligopoly market??
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Which of the following statements about oligopoly are FALSE: A. Oligopolies have a tendency to collude and form cartels in order to split monopoly like profits B. Oligopolistic markets under collusion are socially inefficient (create deadweight loss) C. If two firms are in a collusion and Firm 1 violates the agreement by lowering the price, Firm 1 will increase its own profit but overall profit in the industry will go down D. All of the above statements are true
if two firms (firm A and firm B) are competing selling T-shirts, both at $12 per shirt, both have a quantity of 50 and both can produce a t-shirt at a cost of $2 per shirt both marginal and average. If both companies are competing directly against each other in prices, what will the new marginal price of company B will be? and what will be their profits? Also, how do you solve the equilibrium price in oligopolies?
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which of the following statements about industries that are oligopolies is false? Select one a. An oligopoly with two firms is calleda duopaly, b. Firms in these industries may attempt to cooperate. C The fact that there is more than one firm in an oligopoly means that there are no barrien to entry d. Firms in these industries are interdependent
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