1. Which of the following statements about oligopolies is notcorrect? a. Oligopolistic firms always charge the monopoly...
Question:
1. Which of the following statements about oligopolies is notcorrect?
a. | Oligopolistic firms always charge the monopoly price. | |
b. | Oligopolistic firms are interdependent in a way that firms inperfect competition are not. | |
c. | An oligopolistic market has only a few sellers. | |
d. | The actions of any one seller can have a large impact on theprofits of all other sellers. |
2. Which is true of an oligopoly market that reaches a Nashequilibrium?
a. | The firms will not have behaved as profit maximizers. | |
b. | A firm will have chosen its best strategy, given the strategieschosen by other firms in the market. | |
c. | A firm will not take into account the strategies of competingfirms. | |
d. | The market price will be different for each firm. |
3. In game theory, what is a dominant strategy?
a. | the best strategy for a player to follow, regardless of the whatstrategies other players use | |
b. | a strategy that makes every player better off | |
c. | a strategy that must appear in every game | |
d. | the best strategy for a player to follow only if other playersare cooperative |
4. Which of the following situations produces the largestprofits for oligopolists?
a. | The firms reach a Nash equilibrium. | |
b. | The firms combine to produce the monopoly output level. | |
c. | The firms set prices equal to marginal cost. | |
d. | The firms produce a quantity of output that lies between thecompetitive outcome and the monopoly outcome. |
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary