Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Textbook Question
Chapter 18, Problem 1MCQ
Which of the following statements is incorrect. In oligopoly, ____________ .
A. barriers to entry prevent new firms entering
B. each firm’s profit is influenced by each other firms’ advertising
C. each firm’s action is influenced by the actions and reactions of each other firm
D. each firm is a
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a) Using the following graph state the price and quantity the firm will be at if the oligopoly
market is competitive and in long run equilibrium. Explain why the firm will be at that price and
quantity.
MC
ATC
1 E
10
20
30
40
50
60
70
80
Quantity
b) Using the same graph explain what the price and quantity would be if the market formed a
cartel. Explain the cartel and how it works, and why firms form them.
Price and Cost (dollars)
What is the market structure that best suits the above firm?
PRICE (Dollars)
22
10
10
ATC
20 30 40 60 60 70 80 90 100
QUANTITY (Units)
a. Perfect competition
b. Natural monopoly
c. Oligopoly
d. None of the above.
K
Which of the following statements is incorrect? In oligopoly
www
A. each firm's action is influenced by the actions and reactions of each other firm
OB. barriers to entry prevent new firms entering
OC. each firm is a price taker and the price is the monopoly profit-maximizing price
OD. each firm's profit is influenced by each other firms' advertising
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Chapter 18 Solutions
Foundations of Economics (8th Edition)
Ch. 18 - Prob. 1SPPACh. 18 - Prob. 2SPPACh. 18 - Prob. 3SPPACh. 18 - Prob. 4SPPACh. 18 - Prob. 5SPPACh. 18 - Prob. 6SPPACh. 18 - Prob. 7SPPACh. 18 - Prob. 8SPPACh. 18 - Prob. 1IAPACh. 18 - Prob. 2IAPA
Ch. 18 - Prob. 3IAPACh. 18 - Prob. 4IAPACh. 18 - Use this information to work Problems 5 to 7. DOJ...Ch. 18 - Use this information to work Problems 5 to 7. DOJ...Ch. 18 - Prob. 7IAPACh. 18 - Which of the following statements is incorrect. In...Ch. 18 - If firms in oligopoly form a cartel, it will...Ch. 18 - Prob. 3MCQCh. 18 - Prob. 4MCQCh. 18 - Prob. 5MCQCh. 18 - Prob. 6MCQCh. 18 - Prob. 7MCQ
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- Question 20 In the market for a brand name medicine with a single company selling the medicine, that company is a_______Eventually, the government lets other companies sell the medicine as a "generic" alternative to the brand name. The effect of this increased competition is to_______ the medicine's price.O. monopoly, decreaseO. oligopoly, decreaseO. monopoly, increaseO. oligopoly, increasearrow_forwardWhich of the following would most likely create the setting for an Oligopoly ? A. The government grants T'Challa and Nakia a patent for their respective vibranium-based electric car batteries. B. Market Demand is two or more times less than the quantity needed to produce at the minimum of the Average Cost Curve. C. Market Demand is two or more times greater than the quantity needed to produce at the minimum of the Marginal Cost Curve. D. Insumountable technological difficulty associated with producing similar products serves as an effective Barrier to Entry. E. All of the Abovearrow_forwardAn oligopoly takes into account the decisions made by other companies before lowering its price.. true or falsearrow_forward
- Which of the following is a feature of an oligopoly? a. group behavior among firms b. firms that are all similar in size c. low barriers to entry d. highly flexible pricingarrow_forwardWhat is the primary strategy used by firms in oligopolistic markets to maximize profits?A. Price competitionB. Quantity competitionC. CollusionD. Non-price competitionarrow_forward1arrow_forward
- Explain the following. A. Economies of Scale B. Oligopolyarrow_forwardWhich of the following is not true about oligopoly? A. there are few sellers B. profit is higher if there is collusion C. collusion is always subject to threat of a member violating the collusive agreement D. a cartel is an official organization of oil exporting countries which aims to maximize the profits for the group E. all are truearrow_forwardFor each statement in the left column find and match convenient part from the right column of the table: Write your answer A. The market, represented by a group of sellers, unified by an agreement on its segmentation and final price of the production, is considered as ... 1. ... for the oligopoly B. The situation in which society undergoes losses due to high prices and low output is more typical for ... 2 ... for the price discrimination C. The market in which several sellers can affect and control the price of products in an industry is typical for ... 3. ... for the price competition D. The situation when a different price is given for the same product is typical for ... 4. ... for the market of imperfect competition E. Limited resources is the main factor determining the situation typical for ... 5. ... for the perfect competition F. The absence of the supply curve is typical for... 6. ... for the cartel…arrow_forward
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