If the members of an oligopoly could agree on a total quantity to produce, what quantitywould they choose? If the oligopolists do not act together but instead make productiondecisions individually, do they produce a total quantity more or less than in your answerto the previous question? Why?

A oligopoly market consists of few sellers concentrating the market supply. They manage the market…

Answered: If the members of an oligopoly could…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 4CQQ

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if two firms (firm A and firm B) are competing selling T-shirts, both at $12 per shirt, both have a quantity of 50 and both can produce a t-shirt at a cost of $2 per shirt both marginal and average. If both companies are competing directly against each other in prices, what will the new marginal price of company B will be? and what will be their profits? Also, how do you solve the equilibrium price in oligopolies?
Suppose that an oligopolistic is charging $21 per unit of output and selling 31 units each day. What is its daily total revenue? Also suppose that previously it had lowered its price from $21 to $19, rivals matched the price cut, and the firmâ€™s sales increased from 31 to 32 units. It also previously raised its price from $21 to $23, rivals ignored the price hike, and the firmâ€™s daily total revenue came in at $482. Which of the following is most logical to conclude? The firmâ€™s demand curve is (a) inelastic over the $21 to $23 price range, (b) elastic over the $19 to $21 price range, (c) a linear(straight) down sloping line, or (d) a curve with a kink in it?
bok rint An oligopoly producing a homogeneous product is comprised of three firms that act like a cartel. Assume that these three firms have identical cost schedules. Assume also that if any one of these firms sets a price for the product, the other two firms charge the same price. As long as they all charge the same price they will share the market equally; and the quantity demanded of each will be the same. Below is the total-cost schedule of one of these firms and the demand schedule that confronts it when the other firms charge the same price as this firm. Complete the marginal-cost and marginal- revenue schedules facing the firm. erences Mc Graw Hill Output Total cost Marginal cost Price Quantity demanded Marginal revenue 0 1 23456 7 8 $0 180 300 480 720 1,020 1,380 1,800 2,280 Short Anewor LA JUL 26 $780 720 660 600 540 480 420 360 Toolbar navigation (a) What price would be charged, what output would be produced, and what profit would be made by this firm? (b) If the firms…
What are some of the barriers to entry that can keep the number of sellers small in an Oligopoly? Explain what these barriers to entry can mean for the long run profits in oligopoly. Give a few examples of businesses that you think are oligopolists and what the barriers to entry are in those markets.
In 2018, Delta Air Lines said that it was increasing its fares by 4% because its fuel bill jumped by 33% from the previous yoar. Other airines also announced fare increases. Assuming that these firms are oligopolistic and the outcome is a Nash-Coumot equilibrium, why did the prices rise less than in proportion to the firms' cost? Price rose less than the firms' costs in this oligopoly because O A. demand is not perfectly inelastic. O B. consumers are not price sensitive. OC. the firms are price takers. D. air travel has no close substitutes.
Consider a "punishment" variation of the two-firm oligopoly situation shown in the figure below. Suppose that if one firm sets a low price while the other sets a high price, then the firm setting the high price can fine the firm setting the low price. Suppose that whenever a fine is imposed, X dollars are taken from the low-price firm and given to the high-price firm. RareAir's price strategy High Low $12 $15 A B High $12 $6 $6 $8 Low $15 $8 Instructions: Enter your answer as a whole number. What is the smallest amount that the fine X can be such that both firms will want to always set the high price? $O million Uptown's price strategy
Next, explain how it can be applied to the decisions that have to be made in an oligopoly. What specifically is the decision to be made by each seller in an oligopoly? How does each possible outcome in the prisoners' dilemma map into an outcome in an oligopoly? What do you think each seller's dominant strategy will be? Examine and discuss how the role of communication, specifically the lack of communication, can lead to an outcome that is worse for the players. (Of course, it is against U.S. law for the sellers to conspire to make the market less competitive!) Can you think of other examples of how the prisoners' dilemma could be applied to business decision making? Discuss any other applications of a prisoners' dilemma game you find to be interesting, whether from the text or one you can think of on your own.
Cite an example of an oligopolistic industry in the Philippines and discuss how these oligopolists behave and interact with each other in the industry
One key difference between an oligopoly market and a competitive market is that oligopolistic firms O are price takers while competitive firms are not. sell their product at a price equal to marginal cost while competitive firms do not. O can affect the profit of other firms in the market by the choices they make while firms in competitive markets do not affect each other by the choices they make. O sell completely unrelated products while competitive firms do not
if the members of an oligopoly could agree on a total quantity to produce,what quantity would they choose?If the oligopolists do not act together but instead make production decisions individually,do they produce a total quantity more or less than in your answer to previous question?why?
What is the distinguishing characteristics of oligopoly in relation to the other forms of the other market organizations? What is its significance? In which sector of the Zambian economy is oligopoly most relevant? An oligopolistic firm from the telecommunication industry in Zambia follows demand-and-cost situation in 2009.Price in ZWK Quantity Total cost20 7 3619 8 4518 9 5417 10 6316 11 7215 12 81i. How much output should the oligopolistic produce? What price should it charge and what is the maximum profit can this firm earns?
Explain the kinked demand curve theory of an oligopoly. Include inyour answer a discussion of a contemprary oligopoly.

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If the members of an oligopoly could agree on a total quantity to produce, what quantity would they choose? If the oligopolists do not act together but instead make production decisions individually, do they produce a total quantity more or less than in your answer to the previous question? Why?