Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 10, Problem 11P
To determine
The difficulty in predicting a firm’s behavior under oligopoly.
Concept Introduction:
Oligopoly refers to a market which is dominated by a small number of large sellers (oligopolists). Oligopoly has its own market structure.
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1. Why do oligopolies exist?
A. A small number of firms have established barriers to entry using economies of scale, patents, and sheer size to prevent other firms from challenging them.
B. The oligopolistic firms are created, run, and supported by the government.
C. The members of an oligopolistic market are producing in the upward sloping range of their long run average cost curves.
1. compare the quantity and price of an oligopoly to those of a monopoly
2. compare the quantity and price of an oligopoly to competitive market
56.Assume that an oligopoly's four enterprises are forming a pact to cooperate. How might the ease of entry into their industry influence how much they charge?
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- What are the main characteristics of oligopoly? How does output and price compare to that of perfect competition? What are the main characteristics of oligopoly? How does output and price compare to that of perfect competition? View keyboard shortcuts EditViewInsertFormatToolsTable 12pt Paragrapharrow_forward2. Which is a better market structure, Monopoly or Oligopoly? Why?arrow_forward06arrow_forward
- answer quicklyarrow_forward18. Horizontal Integration is most likely to lead to an industry that is: monopolistically competitive an oligopoly any of the other answers O perfectly competitivearrow_forward1. Characteristics of oligopoly The oligopoly market structure is characterized by several defining qualities, one of which is either similar or identical products. Of the following list of characteristics, which others describe the oligopolistic market structure? Check all that apply. Market control by many small firms Neither mutual interdependence nor mutual dependence Mutual interdependence Difficult entry Market control by a few large firmsarrow_forward
- 1. The table below shows the percentage of sales held by the four largest firms in an industry. Company A B C D Market share (percent of sales) 12 10 5 3 a) Calculate this industry's four-firm concentration ratio. b) Is this industry competitive? why? c) What market type does it most likely represent?arrow_forward(Game Theory) Suppose there are only two automo- bile companies, Ford and Chevrolet. Ford believes that Chevrolet will match any price it sets, but Chevrolet too is interested in maximizing profit. Use the following price and profit data to answer the following questions. Ford's Chevrolet's Ford's Chevroleť's Selling Selling Profits Profits (millions) $8 Price Price (millions) $ 4,000 4,000 4,000 8,000 8,000 8,000 12,000 12,000 12,000 $ 4,000 8,000 12,000 4,000 8,000 12,000 4,000 8,000 12,000 $8 12 6 14 2 6 12 10 12 10 6 14 6 12 a. What price will Ford charge? b. What price willI Chevrolet charge once Ford has set its price? c. What is Ford's profit after Chevrolet's response?arrow_forwardBriefly explain how firms compete/set price under the Oligopoly market structure. Provide relevant examples.(500-700 words)arrow_forward
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