Collusion refers to a situation where rival firms decide to

Updated on August 6, 2022

competitive industry? equilibrium in a monopolistically 17. D, pe Mc of games such Chapter 12 behavior, originated from the study 18. Game theory, which is used in studying oligo 19. collusion refers to a situation where rival firms decide to: A. Compete aggressively against each other B, cheat on each other and output other Agree with each other to set prices with each D. Combine their operations and merge 20 Mutual interdependence means that each firm in an oligopoly: policy A. Faces a perfectly inelastic demand for its product its price B. Considers the reactions of its rivals when it determines Depends on the others for its inputs D. Depends on the others for its markets 21. A firm in an oligopoly is similar to a monopoly in that: price A. Both firms do not face competition from others over B. Both firms could have significant market power and control C. Both firms face very inelastic demand for their products D. Both firms do not need to advertize 22. Which cannot be a characteristic of an oligopolistic industry? A. Differentiated products B. A large number of consumers Significant barriers to entry D. A perfectly elastic firm demand curve
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Answer

1) Game theory, which is used in studying oligopoly behaviour,
originated from the study of games such as the following except

Solution: Solitaire

Explanation: Game theory can be used for studying for oligopoly
market structure

2) Collusion refers to a situation where rival firm decides
to

Solution: Agree with each other to set prices and output

Explanation: Price collusion is when number of companies work
together to keep the price of a product or service at an elevated
level with the goal of receiving high profits or cornering the
market

3) A firm in an oligopoly is similar to monopoly in that

Solution: Both firms could have significant market power and
control over price

Explanation: An oligopoly is similar to a monopoly on an
exception that rather than one firm, two or more firms dominate the
market

4) Which cannot be characteristic of an oligopolistic
industry?

Solution: A perfectly elastic firm demand curve

Explanation: A perfectly competitive firm’s demand curve is
perfectly elastic or horizontal.