ECON 150 CH 13 Monopolistic Competition & Oligopolies

Monopolistic competition resembles pure competition because:

A monopolistically competitive industry combines elements of both competition and monopoly. The monopoly elements results from:

The demand curve of a monopolistically competitive producer is:

Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. The profit-maximizing output for this firm will be:

If some firms leave a monopolistically competitive industry, the demand curves of the remaining firms will:

Refer to the diagram for a monopolistically competitive producer. This firm is experiencing:

The economic inefficiencies of monopolistic competition may be offset by the fact that:

The copper, aluminum, cement, and industrial alcohol industries are examples of:

If there are significant economies of scale in an industry, then:

What market models do demand and marginal revenue diverge?

Oligopoly is more difficult to analyze than other market models because:

If the four-firm concentration ratio for industry X is 80:

The Herfindahl index for the industry is:

Refer to the diagram where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If both firms follow a high-price policy:

Refer to the diagram where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. With independent pricing, the outcome of this duopoly game will gravitate to cell:

The diagram portrays:

The likelihood of a cartel being successful is greater when:

(Consider This) The prisoner's dilemma reveals that:

Refer to the payoff matrix. Which of the following statements is true regarding the outcome of this game?

In game theory, the credibility of a threat:

The most common reason that oligopolies exist is:

The kinked-demand curve for oligopolists assumes that rivals will:

There are 10 firms in an industry, and each firm has a market share of 10 percent. The industry's Herfindahl index is:

Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. This firm's profit-maximizing price will be:

Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. This firm will realize an economic:

Refer to the diagram. If all monopolistically competitive firms in the industry have profit circumstances similar to this firm:

Refer to the diagram where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If Beta commits to a high-price policy, Alpha will gain the largest profit by:

Refer to the diagram where the numerical data show profits in millions of dollars. Beta's profits are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If Alpha and Beta engage in collusion, the outcome of the game will be at cell:

Refer to the diagram. Equilibrium price is:

Refer to the payoff matrix. Which of the following statements is true regarding the outcome of this game?

The restaurant, legal assistance, and clothing industries are each illustrations of:

In the short run, a profit-maximizing monopolistically competitive firm sets it price:

Refer to the diagrams, which pertain to monopolistically competitive firms. A short-run equilibrium entailing economic profits is shown by:

When a monopolistically competitive firm is in long-run equilibrium:

The automobile, household appliance, and automobile tire industries are all illustrations of:

The mutual interdependence that characterizes oligopoly arises because:

Suppose the only three existing manufacturers of video game players signed a written contract by which each agreed to charge the same price for products and to distribute their products only in the geographical area assigned them in the contract. This best describes:

Secret conspiracies to fix prices are examples of:

Resource pricing:

The factors determining resource demand differ from those determining product demand because the demand for products:

The demand for a resource is a derived demand. This is because:

Resource demand curves slope downward because:

In 2009 General Motors (GM) announced that it would reduce employment by 21,000 workers. What does this decision reveal about how GM viewed its marginal revenue product (MRP) and marginal resource cost (MRC)? This decision indicates that for those 21,000 workers:

In 2009 General Motors (GM) announced that it would reduce employment by 21,000 workers. What does this decision reveal about how GM viewed its marginal revenue product (MRP) and marginal resource cost (MRC)? GM didn't reduce employment by more than 21,000 workers because:

What factors determine the elasticity of resource demand?

Florida citrus growers say that the recent crackdown on illegal immigration is increasing the market wage rates necessary to get their oranges picked. Some are turning to $100,000 to $300,000 mechanical harvesters known as "trunk, shake, and catch" pickers, which vigorously shake oranges from trees. If widely adopted, this will:

The substitution of ATMs for human tellers is an effort to:

Some banks are beginning to assess transaction fees when customers use human tellers rather than ATMs. This will:

Alice runs a shoemaking factory that utilizes both labor and capital to make shoes. What would shift the factory's demand for capital?

FreshLeaf is a commercial salad maker that produces "salad in a bag" that is sold at many local supermarkets. Its customers like lettuce but don't care so much what type of lettuce is included in each bag of salad, so you would expect FreshLeaf's demand for iceberg lettuce to be:

A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should:

The difference between monopolistic competition and pure competition is that in comparison to pure competition, monopolistic competition has:

The difference between monopolistic competition and pure monopoly is that in comparison to monopolistic competition, pure monopoly has:

Product differentiation:

Firms will enter a monopolistically competitive industry when there are:

Compare the elasticity of a monopolistic competitor's demand with that of a pure competitor and a pure monopolist.

"Monopolistic competition is monopolistic up to the point at which consumers become willing to buy close-substitute products and competitive beyond that point." This statement recognizes that products of monopolistically competitive firms:

"Competition in quality and service may be just as effective as price competition in giving buyers more for their money." This statement is true:

Monopolistically competitive firms frequently prefer nonprice to price competition because:

In monopolistically competitive industries, economic profits are competed away in the long run; hence, there is no valid reason to criticize the performance and efficiency of such industries. In monopolistically competitive industries:

"In the long run, monopolistic competition leads to a monopolistic price but not to monopolistic profits." This statement is:

What products or services of oligopolists that you regularly purchase or own?

Oligopoly differs from monopolistic competition in that oligopoly:

Using the payoff matrix below, X and Y are:

Using the payoff matrix, and assuming no collusion between X and Y, what is the likely pricing outcome?

Refer to the matrix. Price collusion is mutually profitable because each firm would achieve

There might be a temptation to cheat on the collusive agreement because each firm could:

There is a gap in the oligopolist's marginal-revenue curve because:

The kinked-demand curve explains price rigidity in oligopoly because:

Shortcomings of the kinked-demand model include:

Price collusion occurs in oligopolistic industries because:

Assess the economic desirability of collusive pricing.

Price leadership is legal in the United States, whereas price fixing is not. This is because price leadership is:

Advertising is an important aspect of monopolistic competition and oligopoly because:

Advertising promotes efficiency and benefits consumers by:

Persuasive advertising:

In the small town of Geneva, there are 5 firms that make watches. The firms' respective output levels are 30 watches per year, 20 watches per year, 20 watches per year, 20 watches per year, and 10 watches per year. The four-firm concentration ratio for the town's watch-making industry is:

What best describes the efficiency of monopolistically competitive firms?

Which of the following apply to oligopoly industries?

Faceblock, Gargle+, and MyMace are rival firms in an oligopoly industry. If kinked-demand theory applies to these three firms, Faceblock's demand curve will be:

Consider an oligopoly industry whose firms have identical demand and cost conditions. If the firms decide to collude, then they will want to collectively produce the amount of output that would be produced by:

In an oligopoly, each firm's share of the total market is typically determined by:

Some analysts consider oligopolies to be potentially less efficient than monopoly firms because at least monopoly firms tend to be regulated. Arguments in favor of a more benign view of oligopolies include:

Collusive agreements can be established and maintained by:

T/F; Potential rivals may be more likely to collude if they view themselves as playing a repeated game rather than a one-time game.

Property developers who build shopping malls like to have them "anchored" with the outlets of one or more famous national retail chains, like Target or Nordstrom. Having such "anchors" is obviously good for the mall developers because anchor stores bring in a lot of foot traffic that can help generate sales for smaller stores that lack well-known national brands. But what's in it for the national retail chains? Why become an anchor?