There are four forms in a oligopolistic industry. The firms agree to collude and act like a monopoly. if one of the firms violates the agreement and charges a lower price or sells a larger quantity than what was agreed to what will happen in the short run.
The firm that cheats will earn higher profits, and industry profits will be lower
New cards
2
a collusive agreement to fix prices among firms in an oligopolistic industry is more likely to be broken under which of the following conditions
It is easy for new firms to enter into the industry
New cards
3
It is difficult for cartels to maintain collusive agreement because
Each firm has an incentive to cheat to increase its own profit
New cards
4
The cartel model of all oligopoly predicts that
All the firms in the industry act in unison to set a monopoly Price
New cards
5
assuming both firms know the information in the matrix, which if the following correctly describes the dominant strategy of each firm
Alpha- Do not raise; Beta- Do not raise
New cards
6
The Nash equilibrium to this game, if one exists, is which of the following
High price, Advertising
New cards
7
Collusion, price leadership, and price wars are usually observed in which of the following market structures
Oligopoly
New cards
8
In regards to market efficiency, all oligopolies have
Neither productive nor allocative efficiency
New cards
9
Oligopolistic firm successfully maintain a long-term collusive agreement
The product price is higher than the marginal cost
New cards
10
evergreen and nature view
when evergreen bids high and nature green bids low
New cards
11
Given the data, what would be the payouts for both firms assuming they don't collude
alpha: 30; beta: 120
New cards
12
One characteristic that makes oligopolies unique among the market structure is
Mutual interdependence among the firms
New cards
13
The characteristic of oligopolistic firms that makes them different from all other types of firms is that oligopolistic firms
Consider each other's decisions
New cards
14
when firms interact in an oligopolistic market which of the following statements is true
If both firms have dominant strategies then there is a Nash equilibrium
New cards
15
Game theory is most useful in describing outcomes in markets where,
Studied by 0 people
