37. Which of the following is a characteristic of an oligopolistic market struct

Question

37. Which of the following is a characteristic of an oligopolistic market structure! A) Each firm sells a unique product. ) It is easy for new firms to enter the industry. C) There are few dominant sellers. D) Each firm need not react to the actions of rivals. 38. Economies of scale exist when a firm's- _ average costs falls at it output: A) Long-run; decreases B) Short-run; decreases C) Long-run; increases D) Short-run; increases Table 2 Player A Confess A: 3 years Don't Confess A: 10 years Player B Confess A: 1 year A: 2 years B: 2 years Don't Confess Table 2 shows the payoff matrix for a prisoner's dilemma game. The payoffs in the ta years of prison term. Each player prefers a lesser prison term. 39. Refer to Table 2. The Nash equilibrium is that A) both prisoners don't confess. B) prisoner A confesses while prisoner B doesn't confess. C) prisoner A doesn't confess while prisoner B confesses. D) both prisoners confess 40. All of the following industry types have market power except A) Oligopoly B) Perfect competition C) Monopoly D) Monopolistic competition

Explanation / Answer

Answer to question number 37 is option C. Oligopoly market structure has few firms that dominate the market and determine the price strategically. The market share of these firms is larger than other smaller firms in the market.

Answer to question number 38 is option C

Long run average total cost Falls as the level of output increases only when there are the Economics of scale. Long run average total cost becomes constant when there are constant returns to scale and similarly long run average total cost arises when there are diseconomies of scale. This shapes the long run average cost curve u shaped.

Answer to question number 39 is option A. Both players have dominant strategy of selecting confess because the relative prison term is higher in case of not confessing.

Answer to question number 40 is option B. Perfect competition has firms that have too much power over production or price. They have to take the price has given because there are so many sellers in the market.

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