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Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
16th Edition
ISBN: 9781305648210
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel; David A. Macpherson
Publisher: Cengage Archive
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Chapter 11, Problem 8CQ
To determine
Explain the oligopolistic collusion.
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Why does price leadership sometimes evolve in oligopolistic markets?
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Chapter 11 Solutions
Aplia for Gwartney/Stroup/Sobel/Macpherson's Microeconomics: Private and Public Choice, 16th Edition, [Instant Access], 1 term (6 months)
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- What are the incentives for firms in an oligopoly to collude or work together? Has price collusion happened in the past?arrow_forwardWhat is a characteristic of an oligopoly? Group of answer choices Easy entry and exit One firm Many, small firms Some barriers to entryarrow_forwardShould competitors work together in an oligopolistic market?what is it called if they do,and is it legal?arrow_forward
- What is oligopoly?arrow_forwardWhat are the incentives for firms in an oligopoly to collude or work together? Explain a past case on price collusion.arrow_forwardWhat are the major characteristics of a firm competing under conditions of monopolistic competition? What are the major characteristics of a firm competing under conditions of oligopoly? Why does the movie theater charge matinee customers a lower price than the night time customers? Why is there an increased incentive for collusion among oligopoly firms?arrow_forward
- The French economist Antoine Cournot developed an interesting model of competition in an oligopoly that now bears his name. In a Cournot oligopoly, all of the firms know that the total output from all firms will determine the price (based on the downward-sloping market demand curve), but they make independent and simultaneous decisions about how much output to produce. Cournot developed this model after observing how a spring water duopoly (two firms) behaved. So let’s look at a duopoly example.For each firm to decide how much to produce, it must make a guess about how much the other firm is going to produce. Also, the firms basically assume that once the other firm has decided how much to produce, it can’t really change its decision.Here’s an example. Suppose the market demand curve for gallons of fresh spring water looks like the one below and, to keep things simple, the marginal cost of spring water is zero. If Firm X believes that Firm Y is going to produce 100 gallons of spring…arrow_forwardWhat characterizes a market structure known as Oligopoly? How does Oligopoly is both similar to and different from Pure Monopoly?arrow_forwardIf the members of an oligopoly could agree on a total quantity to produce, what quantity would they choose? If the oligopolists do not act together but instead make production decisions individually, do they produce a total quantity more or less than in your answer to the previous question? Why?arrow_forward
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