OLIGOLOPY 1 (2ND TRY) Please answer the following questions rounded to the neare
ID: 1210697 • Letter: O
Question
OLIGOLOPY 1 (2ND TRY)
Please answer the following questions rounded to the nearest whole dollar or unit. The graph below shows the demand curve faced by an oligopolistic firm who is a member of a cartel. Use the graph to answer the questions below. Scroll down to see all the questions. 100 60 Price () 40 30 20 10 10 20 30 Quantity (thousands) What is the most likely price agreed upon by the cartel? What is the most likely quantity agreed upon by the cartel? units The perceived demand curve for this oligopolistic firm in a cartel appears kinked because Piease choose one answer( all firms will match price decreases but not price increases, all firms will match price increases but not price decreases, of the prisonerl's dilemma outcome, all firms are acting like perfect competitors) A.) all firms will match price decreases but not price B.) all firms will match price increases but not price C.) of the prisoneri's dilemma outcome increases decreases D) all firms are acting like perfect competitors)Explanation / Answer
Q4. Cartels generally ensures cooperation in following ways -
1. They closely monitor the cartel members behavior.
2. All price cuts are matched but not increase.
Hence, the correct answer is option (1) and (3).
Q5. Case I - In this case, production has been adjusted by the firm. This implies that the said firm has changed its strategy based on strategy of other firms and his own pay-off. This action has lead to new outcome and new production combination.
Thus, this is an example of Nash equilibrium.
Case II - Both firms are fined for price-fixing. This is an anti-trust action.
Thus, this is an example of anti-trust policy.
Case III - Companies concerned are promoting their production through measures other than price change.
Thus, this is an example of non-price competition.
Case IV - In this case, one firm sets the price and others followed suit.
Thus, this is an example of price leadership.
Case V - IN this case, firm are competing with each other on basis of price.
Thus, this is an example of price competition.
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