ECON CH 16
c. monopolistic competition.
d. perfect competition.
a. produce the perfectly competitive quantity of output.
b. produce more than the perfectly competitive quantity of output.
c. charge the same price that a monopolist would charge if the market were a monopoly.
d. operate according to their own individual self-interests.
a. they are unable to maintain the same degree of monopoly power enjoyed by a
b. each firm’s profit always ends up being zero.
c. society is worse off as a result.
d. Both a and c are correct.
a. higher than in monopoly markets and higher than in perfectly competitive markets.
b. higher than in monopoly markets and lower than in perfectly competitive markets.
c. lower than in monopoly markets and higher than in perfectly competitive markets.
d. lower than in monopoly markets and lower than in perfectly competitive markets.
d. Nash equilibrium market.
a. a competitive equilibrium.
b. an open-market solution.
c. a socially-optimal solution.
d. a Nash equilibrium.
(i) group whose concern is to control production levels of oil.
(iii) resale price maintenance group.
a. (i) and (ii)
b. (ii)and (iii)
c. (i) and (iii)
d. (i), (ii), and (iii)
a. competitive markets.
d. all market structures.
a. the best strategy for a player to follow only if other players are cooperative.
b. the best strategy for a player to follow, regardless of the strategies followed by other
c. a strategy that must appear in every game.
d. a strategy that leads to one player’s interests dominating the interests of the other players.
(i) Rational self-interest leads neither party to confess.
(ii) Cooperation between the prisoners is difficult to maintain.
(iii) Cooperation between the prisoners is individually rational.
a. (ii) only
b. (ii) and (iii)
c. (i) and (iii)
d. (i), (ii), and (iii)
a. should advertise, and she will earn $5,000.
b. should advertise, and she will earn $15,000.
c. should not advertise, and she will earn $10,000.
d. has no dominant strategy.
a. an outcome in which each player is doing their best given the strategies chosen by the
b. an outcome in which no player wishes to change their chosen strategy given the strategies
chosen by the other players.
c. the outcome that occurs when all players have a dominant strategy.
d. All of the above.
a. unenforceable outside of established judicial review processes. b. enforceable with proper judicial review.
c. a criminal conspiracy.
d. a crime, but did not give direction on possible penalties.
a. lawyers are given an incentive to reduce the number of cases involving cooperative
b. individuals can sue to recover damages from illegal cooperative agreements.
c. the government was able to incarcerate the CEO of a firm for illegal pricing
d. private lawsuits are discouraged.
a. prevent oligopolists from acting in ways that make markets less competitive.
b. encourage oligopolists to pursue cooperative-interest at the expense of self-interest.
c. encourage frivolous lawsuits among competitive firms.
d. encourage all firms to cut production levels and cut prices.
a. it allows firms to expand their market power.
b. it allows firms to form collusive arrangements.
c. it prevents firms from forming collusive agreements.
d. the Sherman Act explicitly prohibited such agreements.
a. They may target a business whose practices appear to be anti-competitive but in fact have
b. They promote competition.
c. They limit monopoly power.
d. They prohibit firms from entering or exiting a market.
a. the evidence of its practice is nearly impossible to collect.
b. predatory pricing is not a profitable business strategy.
c. even though predatory pricing is a profitable business strategy, it is on balance beneficial to society.
d. predatory pricing actually attracts new firms to the industry.
a. Predatory pricing
b. Resale price maintenance
a. a patent.
b. impossible to enforce.
c. antitrust law.
d. externality law.
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