Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem © 2013 Pearson Oligopoly 18 CLICKER QUESTIONS © 2013 Pearson Click Clickon onthe thebutton buttontotogo gototothe theQuestion problem Checkpoint 18.1 Checkpoint 18.3 Checkpoint 18.4 Question Question 11 Question Question 66 Question Question 99 Question Question 22 Question Question 77 Question Question 10 10 Checkpoint 18.2 Question Question 33 Question Question 44 Question Question 55 © 2013 Pearson Question Question 88 CHECKPOINT 18.1 Question Because firms in oligopoly are interdependent, _ A barriers to entry not exist B one firm’s profits are affected by other firms’ actions C firms can produce either identical or differentiated goods D there are too many firms for any one firm to influence the price E they compete with each other and in the long run, the price equals the monopoly profit-maximizing price © 2013 Pearson CHECKPOINT 18.1 Question A cartel is a group of firms that _ A acts separately to limit output, fix the price, and to use advertising to compete with each other B agrees to erect barriers to entry C legally fixes prices D agrees to limit the quantity produced so as to raise the price and increase economic profit E agrees to produce an identical good © 2013 Pearson CHECKPOINT 18.2 Question If a cartel achieves the monopoly outcome, one firm can increase its profit if it and only it its price and its output A raises; increases B raises; decreases C lowers; increases D lowers; decreases E raises; does not change © 2013 Pearson CHECKPOINT 18.2 Question The figure shows the market for shampoo when all firms producing shampoo operate as a cartel If the cartel breaks down, the price A remains unchanged B falls from $4 to $2 a bottle C falls from $6 to $2 a bottle D falls from $6 to $4 a bottle E rises from $2 to $4 a bottle © 2013 Pearson CHECKPOINT 18.2 Question Suppose that a duopoly had achieved the monopoly outcome when firm A increased its output If firm B responds by increasing its output, firm B's profit and firm A's profit A increases; increases B increases; does not change C decreases; increases D decreases; decreases E increases; decreases © 2013 Pearson CHECKPOINT 18.3 Question The prisoners’ dilemma game A results in a bad outcome for both prisoners B shows it is easy to cooperate C has an equilibrium in which both prisoners are made as well off as possible D would have the same outcome even if the prisoners could communicate and cooperate E has an equilibrium in which one prisoner is made as well off as possible and the other prisoner is made as worse off as possible © 2013 Pearson CHECKPOINT 18.3 Question Katie and Kris have a collusive agreement If Kris cheats on the agreement, then Kris makes A $9 million if Katie cheats B $0 if Katie doesn’t cheat C –$1 million if Katie doesn’t cheat D $5 million if Katie cheats E either $9 million or $0 depending on what Katie does © 2013 Pearson The payoff matrix: Economic profit in millions of dollars CHECKPOINT 18.3 Question A collusive agreement to form a cartel is difficult to maintain because _ A each firm can increase its profits by cutting its price and selling more B forming a cartel is legal but frowned upon throughout the world C the high cartel price will decrease supply D consumers will boycott the cartel E each firm can increase its profit by producing less than the output set by the cartel © 2013 Pearson CHECKPOINT 18.4 Question Which of the following is always illegal? A possessing a very large market share B selling at a price below other producers to achieve efficiency C price fixing D attempting to merge with a competitor E price discrimination © 2013 Pearson CHECKPOINT 18.4 Question 10 In the case against Microsoft, it was claimed that combining Internet Explorer and Windows was A predatory pricing B an illegal tying agreement C creating one product that is convenient for the consumers D illegal territorial confinement E an inefficient resale maintenance agreement © 2013 Pearson ... payoff matrix: Economic profit in millions of dollars CHECKPOINT 18.3 Question A collusive agreement to form a cartel is difficult to maintain because _ A each firm can increase its profits by. .. boycott the cartel E each firm can increase its profit by producing less than the output set by the cartel © 2013 Pearson CHECKPOINT 18.4 Question Which of the following is always illegal? A possessing... monopoly outcome when firm A increased its output If firm B responds by increasing its output, firm B's profit and firm A's profit A increases; increases B increases; does not change C decreases;