Which of the following is characteristic of oligopoly, but NOT of monopolistic c
ID: 1126623 • Letter: W
Question
Which of the following is characteristic of oligopoly, but NOT of monopolistic competition?
The choices made by one firm have a significant effect on other firms.
Firms are profit-maximizers.
Each firm faces a downward-sloping demand curve.
The choices made by one firm have a significant effect on other firms.
There is more than one firm in the industry.
Question 2
0 out of 1 points
In a prisoner's dilemma, the Nash equilibrium occurs where
both end up with their best outcome.
the one who goes first ends up with his best outcome.
both end up with their best outcome.
only one ends up with his best outcome.
neither person ends up with their best outcome.
Question 3
0 out of 1 points
Which of the following is a distinguishing characteristic of oligopoly?
Natural barriers cannot prevent the entry of new firms.
Natural barriers cannot prevent the entry of new firms.
Firms are free to enter and exit the industry.
A large number of firms compete.
Each firm's actions influence the profits of all the other firms.
Question 4
0 out of 1 points
Sears
Refer to the payoffs in the table above. Sears and Wal-Mart must decide whether to lower their prices based on the profits shown in the table. This game has
a Nash equilibrium: both Sears and Wal-Mart keep prices high.
a Nash equilibrium: Sears keeps its prices high and Wal-Mart lowers its prices.
no Nash equilibrium.
a Nash equilibrium: both Sears and Wal-Mart keep prices high.
a Nash equilibrium: both Sears and Wal-Mart lower prices.
Question 5
1 out of 1 points
Oscar
Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix above shows the economic profit that each firm can make. If the game is played only once, then ________.
Felix and Oscar will each make $1 million economic profit
Felix will cheat and Oscar will make -$2 million economic profit
Felix and Oscar will each make $10 million economic profit
Felix will comply and Oscar will make $12 million economic profit
Felix and Oscar will each make $1 million economic profit
Question 6
1 out of 1 points
Game theory is most useful for analyzing
oligopoly.
monopoly.
perfect competition.
monopolistic competition.
oligopoly.
Question 7
1 out of 1 points
Firm 1
Two software firms have developed an identical new software application. They are debating whether to give the new app away free and then sell add-ons or sell the application at $30 a copy. The payoff matrix is above and the payoffs are profits in millions of dollars. What is the Nash equilibrium of the game?
Both Firm 1 and 2 will give the software application away free.
Both Firm 1 and 2 will give the software application away free.
Both Firm 1 and 2 will sell the software application at $30 a copy.
Firm 1 will give the application away free and Firm 2 will sell it at $30.
There is no Nash equilibrium to this game.
Question 8
1 out of 1 points
One difference between oligopoly and monopolistic competition is that
fewer firms compete in oligopoly than in monopolistic competition.
monopolistic competition has barriers to entry.
fewer firms compete in oligopoly than in monopolistic competition.
a monopolistically competitive industry has fewer firms.
in monopolistic competition, the products are identical.
Question 9
0 out of 1 points
Dr. Smith
Libertyville has two optometrists, Dr. Smith and Dr. Jones. Each optometrist can choose to advertise his service or not. The incomes of each optometrist, in thousands of dollars, are given in the payoff matrix above. Which of the following statements CORRECTLY categorizes the Nash equilibrium for the game?
The game has a Nash equilibrium in which Dr. Smith advertises and Dr. Jones does not advertise.
The game has a Nash equilibrium in which Dr. Smith does not advertise and Dr. Jones does advertise.
The game has a Nash equilibrium in which Dr. Smith advertises and Dr. Jones does not advertise.
The game has a Nash equilibrium in which both optometrists advertise.
The game has a Nash equilibrium in which both optometrists do not advertise.
Question 10
0 out of 1 points
________ is a group of firms that have colluded to limit their output and raise their price.
An oligopoly
An oligopoly
A strategy
A duopoly
A cartel
Question 11
1 out of 1 points
Oligopoly is
like monopoly because there are barriers to entry.
like monopolistic competition because oligopoly firms all sell differentiated goods.
like monopoly because there are barriers to entry.
like perfect competition because oligopoly firms all sell homogeneous goods.
like perfect competition because there are many firms in the industry.
Question 12
0 out of 1 points
Firm A
The above payoff matrix shows the economic profits (in millions of dollars) of two firms in a duopoly that have agreed to a cartel agreement to restrict their output and set their prices equal to the monopoly price. Assuming the game is played once, the equilibrium outcome is where
both choose the monopoly price.
both choose the competitive price.
both choose the monopoly price.
firm A chooses the monopoly price and firm B chooses the competitive price.
firm B chooses the monopoly price and firm A chooses the competitive price.
Question 13
1 out of 1 points
M&M
M&M and Dove are both considering issuing themed holiday candy. The profits for each strategy, regular candy or holiday candy, are summarized in the payoff matrix above.
The Nash Equilibrium in this game is that Dove produces ________ and M&M produces ________.
holiday candy; holiday candy
regular candy; holiday candy
holiday candy; regular candy
regular candy; regular candy
holiday candy; holiday candy
Question 14
1 out of 1 points
Gateway
Dell and Gateway must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above. (The profits are in millions of dollars.) In the Nash equilibrium, Dell's profit is ________ million and Gateway's profit is ________ million.
$10; $10
$15; $15
$5; $20
$20; $5
$10; $10
Question 15
1 out of 1 points
In a prisoners' dilemma game, in the Nash equilibrium
both players have another outcome that does not occur but is more favorable.
collusion would not alter the outcome.
both players have another outcome that does not occur but is more favorable.
neither player has another outcome that does not occur and is more favorable.
one player has another outcome that does not occur and is more favorable.
Question 16
0 out of 1 points
The simplest prisoners' dilemma is a game that, in part, requires
two players who are able to communicate with each other.
an oligopoly with one very large firm.
two players who are unable to communicate with each other.
monopolistic competition.
two players who are able to communicate with each other.
Question 17
1 out of 1 points
In a prisoner's dilemma game, each person will pick
their best outcome given what the other person will do.
their best outcome given what the other person will do.
their worse outcome.
their best outcome after consulting with the other person.
their best outcome.
Question 18
1 out of 1 points
Player A
The table above shows the payoff matrix for a prisoners' dilemma. In the Nash equilibrium
both prisoners get 3 years in jail.
both prisoners get 1 year in jail.
both prisoners get 10 years in jail.
both prisoners get 2 years in jail.
both prisoners get 3 years in jail.
Question 19
1 out of 1 points
An oligopoly is a market structure in which there are
only a few sellers selling either an identical or differentiated product.
a few products sold by many sellers.
only a few sellers selling either an identical or differentiated product.
many sellers selling a differentiated product.
only a few buyers but many sellers.
Question 20
1 out of 1 points
Firm A
Firms A and B can conduct research and development (R&D) or not conduct it. R&D is costly but can increase the quality of the product and increase sales. The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. The Nash equilibrium occurs when
both A and B conduct R&D.
both A and B conduct R&D.
only B conducts R&D.
neither A nor B conduct R&D.
only A conducts R&D.
Tuesday, December 12, 2017 10:47:41 PM EST
Which of the following is characteristic of oligopoly, but NOT of monopolistic competition?
Selected Answer:The choices made by one firm have a significant effect on other firms.
Answers:Firms are profit-maximizers.
Each firm faces a downward-sloping demand curve.
The choices made by one firm have a significant effect on other firms.
There is more than one firm in the industry.
Explanation / Answer
Answer.)
Q1.) The choices made by one firm have a significant effect on other firms.
The mutual interdependence in decision making is only present in oligopoly and not in monopolistic competition.
Q2.) neither person ends up with their best outcome.
In a prisoner's dilemma, “to confess” is the dominant strategy. but best outcome was "not to confess".
Q3.) Each firm's actions influence the profits of all the other firms.
Q4.) a Nash equilibrium: both Sears and Wal-Mart lower prices.
Both parties have a dominant strategy to keep prices lower, therefore its a nash equilibrium.
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