Question 1

Game theory is useful to analyze oligopoly markets because
A)​each firm is a price taker.
B)​the market is comprised of a single firm.
C)​the firms in the market engage in strategic behavior.
D)​each firm produces a differentiated product.

Accepted Answer

Game theory is useful to analyze oligopoly markets because the firms in the market engage in strategic behavior, where their decisions are influenced by the actions of their competitors. This interdependence between firms makes game theory an appropriate tool to analyze their behaviors and predict their likely outcomes.

Question 2

Game theory is necessary to understand which kinds of markets?
(i)perfectly competitive
(ii)monopolistically competitive
(iii)oligopoly
(iv)duopoly
(v)monopoly
A)(i) and (ii) only
B)(iii), (iv), and (v) only
C)(iii) and (iv) only
D)(i), (ii), (iii), (iv), and (v)

Accepted Answer

The answer of Game theory is necessary to understand which...

Quiz 17: Oligopoly

Game theory is useful to analyze oligopoly markets because

Game theory is necessary to understand which kinds of markets? (i) perfectly competitive (ii) monopolistically competitive (iii) oligopoly (iv) duopoly (v) monopoly