Economics MCQs

Page No. 310

A situation in which oligopolists interacting with one another each choose their best strategy given the strategies that all the other oligopolists have chosen is known as a ?


aNash equilibrium


bdominant strategy.


ccartel


dcollusion solution


View Answer Nash equilibrium

When a oligopolist individually chooses its level of production to maximize its profits it charges a price that is ?


a more than the price charged by either monopoly or a competitive market


bless than the price charged by either monopoly or a competitive market


cmore than the price charged by a monopoly and less then the price charged by a competitive market


dless than the price charged by a monopoly and more than the price charged by a competitive market



As the number of sellers in an oligopoly grows larger, an oligopolistic market looks more like ?


a monopoly


b a competitive market


cmonopolistic competition


da collusion solution



If oligopolists engage in collusion and successfully from a cartel, the market outcome is ?


athe same as if it were served by competitive firms.


befficient because cooperation improves efficiency


c the same as if it were served by a monopoly.


dknown as a Nash equilibrium



The market for hand tools (such as hammers and screwdrivers) is dominated by Draper Stanley, and Craftsman This market is best described as ?


amonopolistically competitive


ba monopoly


can oligopoly


dcompetitive


View Answer an oligopoly

In cartels ?


aEach individual firm profit maximizes


bThere may be an incentive to cheat


cThe industry as a whole is loss making


dThere is no need to police agreements



Firms in oligopoly are likely to ?


aInvest heavily in branding


bAct independently of other firms


cTry to differentiate its products


dTry to be a price maker



In Game Theory ?


a Firms are assumed to act independently


bFirms are assumed to cooperate with each other


cFirms collude as part of cartel


d Firms consider the actions of others before deciding what to do



In the kinked Demand Curve theory it is assumed that ?


aAn increase in price by the firm is not followed by others


bAn increase in price by the firm is followed by others


c A decrease in price by the firm is followed by others


dFirms collude to fix the price



If a few firms dominate an industry the market is known as ?


amonopolistic competition


bCompetitively monopolistic


cDuopoly


d Oligopoly


View Answer Oligopoly

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