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Question 1 opt… Show more Question 1 In which market struc

Paper help Economics Question 1 opt… Show more Question 1 In which market struc

Economics

Question 1 opt… Show more Question 1 In which market struc

Question 1 opt… Show more Question 1 In which market structures do firms earn long-term profits of zero? Question 1 options: Monopolistic competition and oligopoly. Perfect competition and monopolistic competition. Monopolistic competition, oligopoly and monopoly. Oligopoly and monopoly. Question 2 Refer to the above figure. Ajax and Greenco are oligopolists. Above you are given the payoff matrix for the two firms giving the payoff associated with different pricing strategies. What is the best strategy for Greenco if Ajax decides on charging a high price? Question 2 options: High price. Low price.High price. There is no best strategy. Not enough information is given to determine the best strategy. Question 3 When network effects are important then an industry can experience Question 3 options: prince-leadership. positive market feedback. a vertical merger. a zero-sum game. Question 4 Oligopoly is a situation when there Question 4 options: are a few large firms in the industry. is one firm in the industry that is fairly large. are too many firms in the industry and there is excess capacity. is one giant firm and many smaller firms forming a competitive fringe. Question 5 A market situation in which there are very few sellers is Question 5 options: entry deterrence strategy. a reaction function. oligopoly. opportunistic behavior. Question 6 The analytical framework in which two or more firms compete for certain payoffs that depend on the strategy that the others employ is Question 6 options: the concentration ratio. network effect. a horizontal merger. game theory. Question 7 Refer to the above table. The four-firm concentration ratio is Question 7 options: 59.2 percent. 72.5 percent. 85.8 percent. 75 percent. Question 8 The market structure of perfect competition is when Question 8 options: there is a single producer of a product. there are many producers of a homogeneous product. there are a small number of interdependent firms that constitute the entire market. there are many producers of a differentiated product. Question 9 The kinked demand curve can explain why Question 9 options: prices in oligopolies are rigid. profits are not as high under oligopoly as one would expect. firms fail to cooperate in most oligopolistic situations. oligopolists usually engage in tit-for-tat strategies. Question 10 Which of the following is true of an oligopoly? Question 10 options: Each firm produces a small portion of the total output. They do not react to actions of their competitors. They engage in nonprice competition. Firms do not care what their competitors do. Question 11 An example of a cooperative game would be Question 11 options: perfect competition. oligopoly. monopolistic competition. a cartel. Question 12 A dominant strategy is one that Question 12 options: always yields the highest benefit regardless of what the other players do. every participant in the game will follow. turns a negative-sum game into a positive-sum game. yields a position of the winner so long as the other participants act as planned. Question 13 The joining of a firm with another to which it sells an output or from which it buys an input is known as Question 13 options: a vertical merger. economies to scale. a horizontal merger. a conglomerate merger. Question 14 A concentration ratio measures Question 14 options: the sales of the three largest firms in the industry minus the costs of these three largest firms in the industry. the excess capacity found in a particular oligopolistic industry. the average size of the firms in the industry. the share of industry production accounted for by the largest firms in the industry. Question 15 Currently Home Center and Handy Center are the two major home improvement stores in the area. It is thought that a new firm plans on entering the market. Handy Center and Home Center have let it be known that they plan on lowering their prices so that they will continue to sell the same output as before. This is known as Question 15 options: limit-pricing model. price leadership. the kinked-demand curve theory. a price war. Question 16 A tendency for a good to come into favor with consumers because other consumers have chosen to buy the item is Question 16 options: negative-sum game. positive market feedback. negative market feedback. price-leadership. Question 17 A pricing campaign designed to capture additional market share by repeatedly cutting prices is known as Question 17 options: limit-pricing model. a price war. the kinked-demand curve theory. price leadership. Question 18 Refer to the above figure. Ajax and Greenco are oligopolists. Above you are given the payoff matrix for the two firms giving the payoff associated with different pricing strategies. What is the best strategy for Greenco if Ajax decides on charging a low price? Question 18 options: High price. Low price. There is no best strategy. Not enough information is given to determine the best strategy. Question 19 The manner in which one oligopolist reacts to a change in price, output, or quality made by another oligopolist in the industry is Question 19 options: the concentration ratio. a cooperative game. a zero-sum game. the reaction function. Question 20 When a new product is introduced in the market Lenny always wants to see how popular the item becomes before he purchases it. Lenny’s behavior is known as Question 20 options: price leadership. overt collusion. a network effect. limit-pricing. • Show less

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