Question 10.15 pts
Monopolistic competition describes a market with: 



Group of answer choices

many firms that sell goods and services that are standardized.




few firms that sell goods and services that are similar, but slightly different.




few firms that sell goods and services that are standardized.




many firms that sell goods and services that are similar, but slightly different.
 
Flag question: Question 2
Question 20.15 pts
Which market goods are imperfect substitutes or differentiated?
Group of answer choices

Perfect competition.

Monopoly.

Monopolistic competition.

Oligopoly.
 
Flag question: Question 3
Question 30.15 pts
Which market product can be both differentiated and standardized?
Group of answer choices

Perfectly competitive.

Monopoly.

Monopolistic competitive.

Oligopoly.
 
Flag question: Question 4
Question 40.15 pts
Which of the following market(s) firms earn normal profits in the long-run?
Group of answer choices

Only in perfectly competition.

Only in monopoly.

In perfectly competition and monopolistic competition.

Only in monopolistic competition.
 
Flag question: Question 5
Question 50.15 pts
A cartel is:
Group of answer choices

a duopoly with more than two firms.

the "leader" of an industry, typically the firm with the largest market share.

a firm that always has a dominant strategy.

a number of firms who collude to make collective production decisions about quantities or prices.
 
Flag question: Question 6
Question 60.15 pts
A company with a strong brand identity:
Group of answer choices

provides product reputation.

conveys to customers an implicit guarantee of a product's quality.

promises consistency to customers.

All of these statements are true.
 
Flag question: Question 7
Question 70.15 pts
A defining characteristic of an oligopoly is:
Group of answer choices

all firms sell a standardized product.

easy entry and exit prevent long-run profits from being possible.

firms in the industry know they are competing with a few large firms with market power.

barriers to entry prevent newcomers to such an industry.
 
Flag question: Question 8
Question 80.15 pts
A duopoly is:
Group of answer choices

two firms agreeing to act like a joint monopolist.

a strategy that benefits both firms.

an oligopoly with two firms.

an agreement, explicit or implied, between two firms.
 
Flag question: Question 9
Question 90.15 pts
Collusion is:
Group of answer choices

the act of firms working together to make decisions about price and quantity.

the act of firms undercutting one another in competition until zero profits are earned.

buyers acting in unison against a company in efforts to change its practices.

None of these statements is true.
 
Flag question: Question 10
Question 100.15 pts
If a monopolistically competitive firm is suffering losses in the short run:
Group of answer choices

the exit of competing firms will shift the firm's demand to the right.

the exit of competing firms will cause price to drop, but not affect the firm's demand curve.

the exit of competing firms will shift the firm's demand to the left.

the exit of competing firms will cause price to rise, but not affect the firm's demand curve.
 
Flag question: Question 11
Question 110.2 pts
A dominant strategy is: 

 

Group of answer choices

one in which it is worse for a firm to follow no matter what strategy other firms choose.

one in which it is best for a firm to follow no matter what strategy other firms choose.

an equilibrium in which each party chooses an action that is optimal given the choices of rivals.

None of these statements is true.
 
Flag question: Question 12
Question 120.2 pts
A NASH equilibrium is:
Group of answer choices

when one strategy is chosen and cannot be changed without making at least one of the players worse off.

when one strategy is always the best for a player to choose, regardless of what other players do.

an equilibrium in which each party chooses an action that is optimal given the choices of rivals.
.


None of these statements is true.
 
Flag question: Question 13
Question 130.75 pts
Coke and Pepsi frequently discount their 2-liter soft drink bottles. Discounting entails revenue loss from a price decrease. However, net revenue gain from a price decrease depends on the reaction of a rival to a price cut.
Coke_pepsi Nash equilibrium.jpg

The diagram illustrates the pricing choices faced by Coke and Pepsi. The choice Coke and Pepsi face is whether to discount or 'not to discount' 2-liter soft drink bottles. Payoffs from the discounting or not discounting are provided in the diagram diagonally.  Upper diagonal values show the payoffs to Coke, and lower diagonal values show the payoffs to Pepsi.


For example, if Pepsi provides no discount and Coke also provides no discount, then the net pay-off from no discount is $1 million each. 

But if Coke provides discounts while Pepsis sticks to the no-discount strategy, Coke's pay-off increases to $1.75 million (upper diagonal) while Pepsi's pay-off decreases to $0.25 million (lower diagonal)

If Pepsi provides discounts while Coke sticks to the no-discount strategy, Pepsi's pay-off increases to $1.75 million (lower diagonal) while Coke's pay-off decreases to $0.25 million (upper diagonal)

If both Coke and Pepsi provide the discount, the pay-off for each is $0.75 million. 


What is the dominant strategy for PEPSI?

Group of answer choices

Provide discount regardless of Coke's pricing strategy

Not discounting.

Not discounting if Coke provides discount.

Discounting if Coke does not discount.
 
Flag question: Question 14
Question 140.75 pts
Coke and Pepsi frequently discount their 2-liter soft drink bottles. Discounting entails revenue loss from a price decrease. However, net revenue gain from a price decrease depends on the reaction of a rival to a price cut.
Coke_pepsi Nash equilibrium.jpg
The diagram illustrates the pricing choices faced by Coke and Pepsi. The choice Coke and Pepsi face is whether to discount or 'not to discount' 2-liter soft drink bottles. Payoffs from the discounting or not discounting are provided in the diagram diagonally.  Upper diagonal values show the payoffs to Coke, and lower diagonal values show the payoffs to Pepsi.


For example, if Pepsi provides no discount and Coke also provides no discount, then the net pay-off from no discount is $1 million each. 

But if Coke provides discounts while Pepsis sticks to the no-discount strategy, Coke's pay-off increases to $1.75 million (upper diagonal) while Pepsi's pay-off decreases to $0.25 million (lower diagonal)

If Pepsi provides discounts while Coke sticks to the no-discount strategy, Pepsi's pay-off increases to $1.75 million (lower diagonal) while Coke's pay-off decreases to $0.25 million (upper diagonal)

If both Coke and Pepsi provide the discount, the pay-off for each is $0.75 million. 


What is the dominant strategy for COKE?

Group of answer choices

Provide discount regardless of Pepsi's pricing strategy

Not discounting.

Not discounting if Pepsi provides discount.

Discounting if Pepsi does not discount.
 
Flag question: Question 15
Question 151 pts
Coke and Pepsi frequently discount their 2-liter soft drink bottles. Discounting entails revenue loss from a price decrease. However, net revenue gain from a price decrease depends on the reaction of a rival to a price cut.
Coke_pepsi Nash equilibrium.jpg
The diagram illustrates the pricing choices faced by Coke and Pepsi. The choice Coke and Pepsi face is whether to discount or 'not to discount' 2-liter soft drink bottles. Payoffs from the discounting or not discounting are provided in the diagram diagonally.  Upper diagonal values show the payoffs to Coke, and lower diagonal values show the payoffs to Pepsi.


For example, if Pepsi provides no discount and Coke also provides no discount, then the net pay-off from no discount is $1 million each. 

But if Coke provides discounts while Pepsis sticks to the no-discount strategy, Coke's pay-off increases to $1.75 million (upper diagonal) while Pepsi's pay-off decreases to $0.25 million (lower diagonal)

If Pepsi provides discounts while Coke sticks to the no-discount strategy, Pepsi's pay-off increases to $1.75 million (lower diagonal) while Coke's pay-off decreases to $0.25 million (upper diagonal)

If both Coke and Pepsi provide the discount, the pay-off for each is $0.75 million. 


What is the NASH equilibrium in the diagram?

Group of answer choices

Both to provide discount.

Both not to provide discount.

Pepsi provides discount while Coke doesn't.

Coke provides discount while Pepsi doesn't.