which is not a characteristic of oligopoly

C) in a repeated game but not a single-play game. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time. a- Compute the Cournot equilibrium total quantity, price, quantity for each firm, and . What is it called when firms reach a verbal or tacit agreement with rivals about price in a social setting like the golf course? E) none of the above. d) Affect costs and influence the products of rival firms, a) Affect profits and influence the profits of rival firms, Which of the following is a model used to examine oligopolistic pricing? Based on her experience with past negotiations, Marilyn knows that lenders are concerned about DTRs debt to equity b) demand theory We can conclude that industry A is. Oligopoly. A. firms have no control over their price B. firms may sell a differentiated product C. firms have market power D. firms may sell a standardized product E. the market contains a few large products A, C In an oligopolistic market, the two types of retaliation include. A non-collusive oligopoly refers to a market situation where the firms compete with each other rather than cooperating. 13) A dominant firm oligopoly might be one for which the Herfindahl-Hirschman Index is Businesses in such a market collaborate to dominate the rest of the players and maximize joint revenue. 7) The kinked demand curve theory of oligopoly predicts that a) Affect profits and influence the profits of rival firms 0. An oligopoly (from Greek , oligos "few" and , polein "to sell") is a market form wherein a market or industry is dominated by a small group of large sellers (oligopolists). c) high to receive a payout of $12 1) A cartel is a group of firms which agree to a) kinked and steep Here, they focus on each other and try to exceed customer expectations in every possible way. Mutual interdependence among the firms in decision making is the essential feature of the oligopolistic market. And that is what turns out to be the unique selling proposition (USP) of the respective brands in the oligopolistic industry. A) in a single-play game or a repeated game. B) the courts. (Pure) Monopoly 3. 300 laborers were employed at the plant that month. c) less than or equal to 40% Oligopolists do not compete with each other. Following are the characteristics of oligopoly: Interdependence. Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. ), Which of the following is true about the oligopolist if rivals match a price cut but ignore a price increase? *increasing economies of scale, *providing misleading information Firms in anoligopoly marketfocus on non-price competition and less innovation but ensure their brands are uniquely identifiable. 2003-2023 Chegg Inc. All rights reserved. Impure oligopoly - have a differentiated product. Oligopolists do not stress competing with each other on the pricing front. B) assumes marginal cost is constant. B) each member will face the temptation to cheat on the cartel price to increase its sales and profit. 3) The Nash equilibrium for a sequential game in a contestable market with locked-in first stage prices results in E) None of the above. You can calculate it by adding Direct Material cost, Direct Labor Cost, & Manufacturing Overhead Cost. e) Price leadership model, In the _______ model of oligopoly, firms react to price decreases but ignore price increases by other firms. 1) The market structure in which natural or legal barriers prevent the entry of new firms and a small number of firms compete is, 2) Suppose that industry A consists of four firms who collectively control 96 percent of total sales in the market. C) specify how marginal cost is determined. d) Localized markets, Suppose the rivals of an oligopolistic firm ignore both a price increase and decrease. The presidents friend constructs and sells single family homes. In doing so, they reduce production and increase prices, a phenomenon called collusion. Monopolistic Competition and Economic Efficiency, Monopolistic Competition Equilibrium| Long-run, Short-run, What is Inflation Mean | Definitions, Types, Causes, How to Calculate the GDP [Definition & Formula], Main Theories of Inflation (With Diagram), Indifference Curve Q&A [Download Indifference Curve Pdf]. A) a firm in an oligopoly market. . Such companies have complete control of the market, earning high profits and gains in a specific sector or service. A) a Competition Tribunal. C)The sales of one firm will not have a significant effect on other firms. Updated: Aug 16, 2022. command economy, economic system in which the means of production are publicly owned and economic activity is controlled by a central authority that assigns quantitative production goals and allots raw materials to productive enterprises. C. The choices made by one firm have a significant effect on other firms. *Large capital investment Their differences can range from. Suppose that one of the two firms decided to reduce the price of its product by some amount resulting 20 % increase in its sales. Marketers highlight the distinguishing features in the product commonly through packaging or a good design, which helps communicate the benefitting factors to the shoppers.read more. A) Strategic Independence It contains well written, well thought and well explained computer science and programming articles, quizzes and practice/competitive programming/company interview Questions. So here we can see a one-way interdependence pattern. The labor productivity at this plant is known to have been 0.100.100.10 vans per labor-hour during that month. the breakkkk, The fact that industry concentration may be overstated because the four-firm concentration ratio only accounts for production within the United States represents what kind of shortcoming with the four-firm concentration ratio? I really hope you learned this article. To further understand market modules follow the below topics. D) equilibrium quantity will be sensitive to small cost changes but price will not. Nokia, however, offers Android phones with the same features and almost similar prices. What are the 4 characteristics of oligopoly? Therefore, the competing firms will be aware of a firm's market actions and will respond appropriately. Marginal costMarginal CostMarginal cost formula helps in calculating the value of increase or decrease of the total production cost of the company during the period under consideration if there is a change in output by one extra unit. D. Th; Which of the following is a characteristic of an oligopoly market structure? . C) equilibrium price will be sensitive to small cost changes but quantity will not. c) Blue jean designer . C) the good produced in the market has been deemed a necessity Marilyn Cox is the office manager for DTR Inc. DTR constructs, owns, and manages apartment b) Collusive pricing model Price collusion caused by market transparency and other factors enables oligopolists to raise their barriers to market entry for new competitors, such as high capital requirements, legal obligations, and consumer loyalty. A) Dr. Smith advertises no matter what Dr. Jones does. d) achieve greater allocative efficiency but lesser productive efficiency, c) give the appearance of increased competition A few firms control most of the production and sale of a product. Demand and cost differences, the number of firms in the industry, and the potential for cheating all represent _____ (one word) to collusion. For a particular industry there may be a low four-firm concentration ratio since it is measured on a nationwide scale, but there can still be a local oligopoly. What happens to oligopolistic firms when a recession occurs? e) low to receive a payout of $8. b) are always less efficient b) The number of employees in an industry who ever have or are currently working for one of the four largest firms b) Lower prices, but greater output *The firm is failing to produce at the profit-maximizing output. c) allocative efficiency but not productive efficiency These firms are large enough that their quantity influences the price and so impacts their rivals. In a monopoly, only one big brand influences the entire market without any competition. 3) Which one the following industries is the best example of an oligopoly? However, firm B will follow the leaders price and equilibrium quantity in order to avoid the uncertainty that can be arisen. *world trade The policy implementation process has not taken in to account the life of rural peasants living in vicinity of cities. The amount of time (in seconds) needed to complete a critical task on an assembly line was measured for a sample of 50 assemblies. However, DTR does not intend to build any single family homes. The profit-maximizing price of firm B is PB(>PA) and the quantity is Xbe. b) kinked demand a) price leadership A) there are fewer than 6 firms in a market a) The possibility of price wars diminishes and profits are maximized. E) A and C. 8) A merger is unlikely to be approved if ________. $1. A cartel is a group of producers of goods or suppliers of services formed through an agreement amongst themselves to regulate the supply of goods or services with the basic intent to illegally regulate the prices or restrict competition regarding the said goods or services. An oligopoly is an industry dominated by a few large firms. a) their prices will be unchanged Compared to pure monopolies, oligopolies ______. It is assumed that all of the sellers sellidentical or homogenous products.read more, monopoly, and monopolistic competition. A) only Bob would like to change his decision. C. Some market power. Lets identify the oligarchy before identifying the characteristics of an oligopoly. a) L-shaped The most important model of oligopoly is the Cournot model or the model of quantity competition. c) Dominant firms c) through product development This has been a Guide to Oligopoly and its definition. D) the four-firm concentration ratio for the industry is small. Though, it is rare to find pure oligopoly situation, yet, cement, steel, aluminum and chemicals producing industries approach pure oligopoly. 2. E) a market with two distinct products. The competing firms are few in number but each one is large enough so as to be able to control the total industry output and a moderate. B) a monopoly. It is used as one of the strategies to increase the business firm's revenue and increase the market share. The concentration ratio is a tool that measures the market share leading companies have in an industry. Libertyville has two optometrists, Dr. Smith and Dr. Jones. c) inflexible E) a cartel. Which is the simple form of oligopoly market? a) payoff c) They move leftward and upward to a higher point on the average-total-cost curve. *Increase profits They may produce homogeneous products or differentiated products. c. Competing firms can enter the industry easily. 11) Because an oligopoly has a small number of firms. Oligopolists seek to maximize market profits while minimizing market competition through non-price competition and product differentiation. d) Firms choose strategies at the same time. Marilyn has been involved in negotiations between DTR and prospective lenders as DTR *Preemptive pricing The urban land lease policy is not very friendly to rural households land in general and the poor land holders in particular. 31) Refer to Table 15.3.7. The total market demand is P(Q) = 50 - 2Q, where Q is the total quantity produced by all (active) firms in the industry. It includes decisions made in concentrated markets, such as product prices, quality standards, and production planning. d) The market contains a few large producers. C. Some market power. D) a firm in perfect competition.

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