Explain why an industry with economies of scale for larger firms tends to be an oligopoly. Why don't we see this for an industry like local restaurants?
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- When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.What is an example of a firm that operates in an oligopoly? The firms that produce operate in oligopoly. O A. strawberries O B. electric power distribution OC. breakfast cereal O D. running shoes O E. pizzaExplain why firms in an oligopoly have an incentive to collude, andwhy they might fail to do so.
- The graph shows the demand curve for cars in 2017. Suppose that the least-possible cost of producing a car is $10,000 and that the efficient scale is 10,000 cars a month. Draw the average total cost curve for a car manufacturer in 2017. Label it. The graph shows that the market for cars is a natural oligopoly with O A. 1 firm OB. 2 firms OC. 3 firms OD. 4 firms 50,000- 40,000- 30,000- 20,000- 10,000- 0- Price (dollars per car) 0 D 30 Quantity (thousands of cars per month) >>> Draw only the objects specified in the question. 50 QThere is much evidence that large firms with considerable market power (firms such asmonopolies) may not maximize profits but may pursue quite different objectives such asgrowth or sales revenue maximization. What are the arguments put forward to defendmonopoly? Name any 5 Generally, the aim of a business is to maximize profit. Which point should a firm operateat in order to achieve maximum profit? By making use of a graph indicate clearly the pointat which a firm makes maximum profit and a point where a firm increase their output inorder to enhance profit as well as well as the points where they should reduce theirproduction if they want to enhance profitWhat is the minimum number of firms required for an industry to be an oligopoly? a. many b. 100 c. 1 d. 3
- Explain why an oligopolist (with few competitors) pays more attention to what its competitorsare doing than a producer in a competitive market(with many competitors) doesFirms J and K produce compact-disc players and compete againstone another. Each firm can develop either an economy player (E)or a deluxe player (D). According to the best available marketresearch, the firms’ resulting profits are given by the accompanyingpayoff table.a. The firms make their decision independently, and each is seeking itsown maximum profit. Is it possible to make a confident predictionconcerning their actions and the outcome? Explain.Firm KE DE 30, 55 50, 60 Firm JD 40, 75 25, 50b. Suppose that firm J has a lead in development and so can move first.What action should J take, and what will be K’s response?c. What will be the outcome if firm K can move first?Suppose that a particular industry has a four-firm concentration ratio of 45 and a Herfindahi index of LS40. Most ikety, this industry would ochieve Mutipie Chaice both productive efficiency and allocative etficency wllocative efficency but not productive effcency nether productive efficiency nor allocative efficiency productive efficiency but not allocative efficiency
- Industrial Economics Suppose a duopoly with nomogenous product Explain what are the effects on fims' profits of having a very harsh competve stance (think about Bertrand duopoly). Describe the strategies firms can adopt in order o ty to increase their profts AThe Economic Census revealed that the HHI for fast-food restaruants in the United States is equal to 345. Based on this information, we can classify the fast-food industry as O perfect competition O monopolistic competition O oligopoly O monopolyBriefly explain how firms compete/set price under - a. Perfect competition b. Oligopoly
