Ch 13: Economics final Flashcards
Flashcard maker : Mya Day
In the short run, the price charged by a monopolistically competitive firm attempting to maximize profits:
May be either equal to ATC, less than ATC, or more than ATC
Refer to the payoff matrix. Suppose that alpha and beta agree that they will both pursue a high-price strategy. if beta then cheats on the agreement in order to increase profits, which of the following is true?
If this is a repeated game, alpha can be expected to pursue a low price strategy in future games
Refer to the profits-payoff table for a duopoly. if the firms are acting independently and firm X sets its price at 6 firm Y will achieve the larges profit by selecting:
4
Refer to the data. Suppose that entry into this industry changes this firm’s demand schedule from columns (1) and (3) shown to columns (2) and (3). We can conclude that this industry is:
Monopolistically competitive
Refer to the diagram for a monopolistically competitive firm in short-run equilibrium. This firm’s profit maximizing price will be:
16
Refer to the diagram for a monopolistically competitive firm in the short-run equilibrium. The profit- Maximizing output for this firm will be
160
Assume six firms comprising an industry have market shares of 30, 30, 10, 10, 10, and 10 percent. The Herfindahl index for this industry is:
(Last Word) In the Internet search market:
Google holds about 70 percent of the market, while Bing and Yahoo together comprise about 28 percent.
If the several oligopolistic firms that comprise an industry behave collusively, the resulting price and output will most likely resemble those of:
Which of the following is correct?
the greater the degree of product variation, the greater is the excess capacity problem.
In the long run, economic theory predicts that a monopolistically competitive firm will:
Refer to the data. The Herfindahl index for this industry is:
In the long run a monopolistically competitive firm:
produces where P = ATC.
An important similarity between a monopolistically competitive firm and a purely competitive firm is that:
economic profit tends toward zero for both
The restaurant, legal assistance, and clothing industries are each illustrations of:
Refer to the diagram. The monopolistically competitive firm shown:
is realizing an economic profit.
(Last Word) Which market structure best characterizes the various Internet markets?
Refer to the diagram. In equilibrium the firm:
Refer to the diagram. In short-run equilibrium, the monopolistically competitive firm shown will set its price:
above ATC
Refer to the diagram. Equilibrium output is:
