Question

7. The une of the wond "moopely" in the name of the market structure produce beyond their efficient scale and so S. The market for hand sools ach as hammers and screwdrivers) is dominated by a few companies such an Black & Decke, Sanley, and Craftsman. This market is best described a D. a monopolistic 9. If firms engage in collusion and saccessfully form a cartel, the market outcome is: А.the same as ifit were smed by a mmpoly B. the same as if it were served by perfectly competitive firms C the same as if it were served by monopolistically competisive firms. D. efficient because cooperation improves efficiency 10 Ulnder a contestable market model, the number of firms grows in an oligopolistic market looks more: A like a monopoly. B. like a cartel C a competitive market D a natural monopoly. 11. Explicit Collusion is difficult for firms in an oligopolistic market to maintain: A. because antitrust laws make collusion illegal B. because, in the case of oligopoly, self-interest is in conflict with cooperation. C because potentially new firms enter the oligopolistic market D. for all of the above reasons 12. Prisoner's dilemma is an example of A. game theory. B monopoly C perfect competition. D. monopolistic competition For questions 13, 14, and 15, use the graph shown below Sparkle Strategy 1 Strategy 2 Strategy 1 Iss000, s6000|s2000, s4,000 Strategy 2 $500, $3,000 $2,500, SO 13. What are the dominant strategies for Bright and Sparkle, respectively? A. Both use "Strategy 1." B. Both use "Strategy 2. C. Bright has no dominant strategy while Sparkle always uses "Strategy 2." D. Bright has no dominant strategy while Sparkle always uses "Strategy 1."

Answer 1

Answer 7- The correct option is A ie., a monopolistically firm faces a downward sloping demand curve for it’s differentiated products and so does a monopolist. I monopolistic competition there many firms that sell their respective products and such products are differentiated from other products in some or the other way. Also the buyers and sellers do not have any kind of perfect knowledge abouvthe market. In case of monopoly a single seller sells it’s produce in the market and faces no competition. In both cases the demand curve is down sloping as in both cases the firms have the power to charge higher proces for it’s products due to diffentiation and hence due to law of demand the demand curve falls.

Answer 8- The correct option is C ie., Oligopoly. In case of oligopoly the market is generally dominated by hand full or few sellers who have a large market share.In oligopoly structure of market there may happen some level of collusion between the sellers and also there might be some barriers to entry in the market. One more trait of oligopoly market is that the products are differentiated.

Answer 9- The correct option is C ie., the same as if it were served by monopoly firm. Since a cartel which forms has almost the same amount of control in the market as a firm will have in monopoly. By forming a cartel they are increasing their power and output capacity and hence ultimately the revenue will also increase. Such firms have a great control over the market justblike in case of monopoly.

Answer 10- The correct option is C ie., a competitive market. This is die to the fact that such firms do not want other firms to enter in the market and hence pose competition to other firms. This is mainly due to the reason of large costs that firms have incurred for entering in the market and thus are very competitive.