Vocab/Example FRQ (Oligopoly)

How many firms are typically found in an oligopoly?

• 1 firm

• 2-5 firms

• 8-15 firms

• 100+ firms

• Monopoly

• Oligopoly

• Monopolistic Competition

• Perfect Competition

• Morning Departure, because $700 > $900

• Evening Departure, because $900 > $700

• Morning Departure, because $1,000 > $750

• Evening Departure, because $750 > $1,000

• Morning Departure, because $700 > $900

• Evening Departure, because $900 > $700

• Morning Departure, because $1,000 > $750

• Evening Departure, because $750 > $1,000

• Morning, because $700 > $600

• Evening, because $600 > $700

• Morning, because $950 > $800

• Evening, because $800 > $950

• Morning, because $700 > $600

• Evening, because $600 > $700

• Morning, because $950 > $800

• Evening, because $800 > $950

If a firm in an oligopolistic market has a "Dominant Strategy" that means the firm...

• Should always pick a particular strategy (ex. sell for low price), regardless of what its competitors choose to do.

• is DOMINANT (ie. way more profitable than all the other firms)

• Must make decisions about pricing/advertising based on the particular decisions made by other firms.

• has a Dominant Strategy to schedule evening departures ($600 > $700 AND $800 > $950)

• has a Dominant Strategy to schedule morning departures ($700 > $600 AND $950 > $800)

• has no dominant strategy

• has a Dominant Strategy to schedule evening departures ($750 > $1,000 AND $900 > $700)

• has a Dominant Strategy to schedule morning departures ($700 > $600 AND $950 > $800)

• has no dominant strategy

Which of the following is the best definition of "Nash Equilibrium" as regards an oligopolistic market?

• Situation in which no firm can benefit from changing its strategy

• Situation in which firms make an equal amount of profit

• Situation in which the total combined profit of all firms in a given market has reached its maximum

• Situation in which Nash (whoever that is) feels satisfied with things.