[Solved] A Special Kind of Imperfectly Competitive Market That Has Only

The following statements describe a cooperative equilibrium in an oligopoly where the firms are jointly maximizing profits by restricting output.Which statement is false? A)An individual firm could increase profits by cheating. B)P > MC for each individual firm. C)MR > MC for each individual firm. D)The firms in the industry will jointly be earning monopoly profits. E)No individual firm will have an incentive to change output.

In an oligopolistic industry,which of the following is an example of a firm-created entry barrier? A)LRAC curve negatively sloped over a large range of output B)large set-up costs C)brand proliferation D)decreasing demand for the product E)price competition

In a typical oligopolistic market,there are A)no barriers to entry,but firms sell differentiated products. B)substantial barriers to entry and firms interact strategically with each other. C)no barriers to entry and firms sell homogeneous products. D)substantial entry barriers,and firms are too large to strategically interact with each other. E)no barriers to entry and firms interact strategically with each other.

An oligopolistic firm can earn positive profits A)because there are barriers to entry. B)only in the long run. C)only in the short run. D)only if it advertises its own product. E)only if it maintains excess capacity in the production of it product.

One reason an oligopolistic firm may have market power is that A)it always makes positive profits. B)it produces a significant fraction of total industry output. C)the market may be "contestable." D)it has dis-economies of scale. E)there are many similar producers.

Consider the three largest cell-phone service providers in Canada - Bell,Telus,and Rogers.If we observe that all three companies increase their monthly service fees simultaneously,we might conclude that A)there is tacit collusion among these firms. B)these firms have monopolized the industry. C)they are perfect competitors and they are unable to set the price. D)they are engaged in predatory pricing. E)they are creating entry barriers to prevent entry by new firms.

Assume that the world's largest smart-phone producers (Apple,Nokia,Samsung,etc.)operate in an oligopolistic industry.In the long run,which of the following is the most important form of competition between these firms? A)predatory pricing B)tacit collusion C)product innovation D)brand proliferation E)advertising

Suppose there are only five construction companies in a particular region that are each large enough to take on large public infrastructure projects (roads,bridges,sewers,etc.).Representatives of these companies meet regularly for coffee or on the golf course and agree on which company will submit the lowest bid for a particular project.This type of firm behaviour is an example of A)cooperative behaviour that results in higher output and lower prices. B)cooperative behaviour that results in increased consumer welfare. C)tacit collusion,and is legal as long as output is not restricted. D)predatory pricing,and is meant to prevent new entrance to the industry. E)explicit collusion and is illegal.

The sugar industry in Canada is effectively a duopoly with two large firms competing with each other for market share.Suppose the two firms collude and successfully restrict joint output to that of a profit-maximizing monopolist.As a result,they each realize an increase in their profits.Why would this collusive agreement be difficult to sustain? A)Because each firm has an incentive to break the agreement by further restricting output in order to increase the price,thereby increasing their own profits. B)Because each firm has an incentive to break the agreement by increasing output in order to increase their own profits. C)Because the firm with the lower long-run average costs will be able to capture all sales,driving the second firm out of the market. D)Because a non-cooperative outcome is inevitable in which output is further restricted and each firm's profit is reduced.

In what way can an oligopolistic market structure be beneficial to society? A)Oligopolistic firms compete through advertising,which increases economic efficiency. B)Oligopolistic firms are able to exploit all existing economies of scale and operate at the minimum of long-run average costs,and thereby reduce the use of society's resources. C)An oligopolistic market structure is most conducive to non-competitive behaviour which leads to lower prices for consumers in the long run. D)An oligopolistic market structure is most adaptive to today's rapid rate of technological change. E)Oligopolistic firms compete through innovation,which is a driving force of economic growth and increasing living standards.