Following reading this chapter, you should know:
1 ) The unique characteristics of oligopoly.
2 . Just how oligopolies take full advantage of profits.
several. How interdependence affects oligopolists' pricing decisions.
Problems intended for Chapter 15
1 . Assume the automobile market in the U. S. is usually divided as follows:
a) What is the four company concentration proportion?
b) Precisely what is the approx . Herfindahl-Hirschman Index?
2 . Assume an oligopolist confronts two possible require curves due to the own result, as illustrated below. The first (A) prevails another oligopolists don't match cost changes. The other (B) dominates if competitors do meet price alterations.
Quantity (units per period)
a) By simply how much does variety demanded alter if cost is reduced coming from $10 to $4 and
i) Rivals match lessen price?
ii) Competition don't match price cut?
b) By simply how much does quantity demanded transform if price are raised via $4 to $9 and
i) Competitors match value hike?
ii) Rivals no longer match value hike?
a few. Suppose the next schedule summarizes the revenue situation facing an oligopolist in the refreshment industry:
Price (per unit) |$0. 31 |$0. forty five |$0. 60 |$0. 62 |$0. seventy |$0. 80 |$0. 80 | |Quantity demanded every period (in millions) |10 |9 |8 |7 |6 |5 |4 |
Using the chart below,
a) Draw the demand and marginal revenue curves facing this firm. b) Identify the profit-maximizing level of end result in a situation in which marginal expense is constant at $0. twenty a unit.
1 . 00
(Quantity in millions)
4. Assume Nike and Adidas use enormous amounts of money each year to promote...