Monopolies
Price Discriminating Monopolies & Monopolistic Competition
Oligopolies
Game Theory
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FINAL JEOPARDY
100
Monopolies are able to make economic profit in the long run because they have high
What barriers to entry?
100
For a non-price discriminating monopoly, the marginal revenue is what in relation to price
What is less than the price
100
When competitors collude and agree to set prices they are what type of Oligopoly
Colluding or a Cartel
100
If each player has chosen a strategy and no player can increase their own expected payoff by changing their strategy while the other player keeps their's unchanged, then the current set of strategy choices constitutes a ____________________________.
What is a Nash Equilibrium?
100
Draw a graph for a monopoly making a profit
200
The profit maximizing rule in a monopoly
What is MR = MC?
200
for monopolistically competitive firms in long run equilibrium price equals?
What is ATC
200
When Oligopolies collude they collectivity act as a ________________ ?
Monopoly
200
Firm 1's dominant strategy is to price high
200
Draw a graph for a price-discriminating monopoly and shade in the profit
300
Assume a monopolist is currently producing in the elastic range of their demand curve. To maximize total revenue, the monopoly should produce where MR is _________
What is ZERO?
300
If a non-price discriminating monopoly could suddenly start price discriminating and charge each consumer exactly what they are willing to pay then MR would be equal to
What is demand?
300
When one firm's actions impacts the outcomes for other firms, those firms are said to be _____________________?
Interdependent
300
What is each firm's dominant strategy if any?
Bender’s dominant strategy is to cheat;
Jibson’s is to not cheat
300
Draw a graph for a monopolistically competitive firm in long-run equilibrium
400
What is $200
400
If a monopolistically competitive firm's variable costs increase, what will happen to QUANTITY and PRICE?
Quantity will Decrease
Price will Increase
400
Give 3 examples of industries which are Oligopolies
Car Manufacturers
Cereal Companies
OPEC
Railroad Companies
Tire Manufacturing
Film and TV Production Companies
400
If both firms know all of the information in the payoff matrix but do not cooperate, what is their daily profit?
Cromie Corp = $5,500
Clifford Incorp = $5,000
400
Draw and label a graph for an Oligopoly
500
CS = ABE
DWL = BCJ
500
In a monopolistically competitive market, if one firm is producing at a loss what will happen to the
1) Number of firms in the market
2) Demand
3) Marginal Revenue
4) Price
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The economic loss causes firms to exit the market, increasing each remaining firm’s market size. That shifts the demand and marginal revenue right until the firm breaks even. Price increases.
500
In a Oligopoly when the ____________ is kinky, the __________ is sticky.
Demand
Price
500
Is there a Nash Equilibrium? If so, what is it?
Yes, Paul’s will price high earning $2100 weekly profit and Sam’s will price low earning $1700 weekly profit.
500
Draw side by side graphs of a perfect competition firm and a monopoly firm making profit. Label all the curves, shade DWL, CS, and PS, label the socially optimal quantity.
500
When one firm can produce the socially optimal quantity at the lowest cost due to economies scale they are a _________________ _________________.
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