Oligopolies

Oligopoly

by Kendrick Broadus

Open Ended

what are the 4 reasons we see monopolies and oligopolies as bad?

Open Ended

which option makes more sense to you? Why?

Open Ended

What are some examples of modern day oligopolies?

Open Ended

What is the purpose of the Sherman Anti-trust law?

Multiple Choice

The most common form of interdependent pricing is when the "BIG BOYS" set the market price and smaller companies follow:

• price leadership

• price war

• collusion

• substitution

Multiple Choice

Which of the following best describes an oligopoly?

• many monopolistically competitive firms

• a few firms sharing monopoly power

• a former monopoly that has been broken up by the government

• a government-granted franchise or monopoly

Multiple Choice

Collusion most frequently occurs in industries that are

• oligopolistic

• monopolistically competitive

• monopolistic

• perfectly competitive

Multiple Choice

The market for crude oil is an example of an oligopolistic market

• TRUE

• FALSE

Multiple Choice

The unique feature of an oligopoly market is that the actions of one seller have a significant impact on the profits of all of the other sellers in the market

• TRUE

• FALSE

Multiple Choice

When oligopolists collude and form a cartel, the outcome in the market is similar to that generated by a perfectly competitive market

• TRUE

• FALSE

Multiple Choice

If oligopolists engagein collusion and successfully form a cartel, the market outcome is

• the same as if it were served by a monopoly

• The same as if it were served by competitive firms

• The same as if it were served by competitive firms

• Known as Nash equilibrium

Multiple Choice

As the number of sellers in an oligopoly increases

• Collusion is more likely to occur because of larger number of firms can place pressure on any firm that defects

• Output in the market tends to fall because each firm must cut back on production

• The price in the market moves further from marginal cost

• The price in the market moves closer to marginal cost

Multiple Choice

Collusion is difficult for an oligopoly to maintain

• Because antitrust laws make collusion illegal

• Because, in the case of oligopoly, self-interest is in conflict with cooperation

• If additional firms enter of the oligopoly

• For all the above reasons

Multiple Select

T or F Would Pepsi and Coke conspire together to make prices?

• True

• False

Multiple Choice

Would McDonalds be in the Oligopoly Industry

• yes

• no

Multiple Choice

Would Cell phone companies be in the oligopoly industry

• yes

• no

Multiple Choice

An oligopoly is defined as a type of

market structure where ____ firms have

market control

• one

• many

• three or more

• two or more

Multiple Choice

What do all oligopolies combined dictate?

• market and competition

• supply and demand

• prices and demand

Multiple Choice

Oligopolies tend to keep prices higher than Perfect competition

• true

• false

Multiple Choice

Collusion is any explicit or implicit agreement between suppliers in a market to avoid competition.

• true

• false

Multiple Choice

An extreme case of oligopoly in which firms collude to raise joint profits is known as a:

• duopoly

• cartel

• dominant producer

• price war

• price leadership

Multiple Choice

If McDonalds, Wendy's, and Burger KIng decided to combine into one mega-fast food restaurant, what would that action be called?

• Externality

• Price-fixing

• Collusion

• Trust

Multiple Choice

Which piece of legislation outlawed price discrimination?

• The Sherman Act

• The Federal Trade Commission Act

• The Morrisey Act

• The Clayton Antitrust Act

Multiple Choice

How does the government break up and prevent monopolies?

• Increased Taxes

• Antitrust legislation and regulation

• Deregulation

• Laissez-faire