Of the various models of noncooperative oligopoly behavior discussed in the text, which one has the greatest shortcoming when it comes to explaining observed behavior in an oligopoly market
What will be an ideal response?
The kinked demand curve model is built around an assumed market price that currently exists for the market's output. Given this initial price, demand is relatively elastic above that price and relatively inelastic below that same price. One of the strong points of this model is its ability to explain the price rigidity that is sometimes observed in oligopolistic markets. Its major shortcoming is that it is does not explain how the initial equilibrium market price is determined. In addition, the price rigidity referred to above is not observed in all oligopolistic markets. The other models of noncooperative oligopoly behavior discussed in the text tend to be much more descriptive in nature, focusing on strategies firms have in fact adopted on occasion in an oligopolistic setting.
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Slick Shades has a constant marginal cost of production equal to $80 and the distributors have a constant marginal cost of distribution equal to $30. If Slick Shades vertically integrates with the perfectly competitive distributors, the profit-maximizing quantity will be ________ the profit-maximizing quantity if they did not vertically integrate and the combined firm will earn ________ profit if
they did not vertically integrate.
The figure above shows the wholesale demand and marginal revenue curves for Slick Shades Sunglasses, a sunglasses firm with market power. Slick Shades Sunglasses has a constant marginal cost of production and it sells to perfectly competitive independent retail distributors that have a constant marginal cost of distribution.
A) the same as; greater
B) greater than; the same
C) the same as; the same
D) greater than; greater
What is fiat money? Why is fiat money important in the United States today?
If a large percentage of economic activity in developing countries is unrecorded, then the countries are likely to rely on which of the following taxes to provide government revenue?
A) Sales taxes B) Property taxes C) Income taxes D) Tariffs
In the above figure, to achieve efficiency the government could offer a subsidy to producers of ________ per vaccination so that consumers would pay ________ per vaccination
A) $20; $20 B) $30; $10 C) $20; $10 D) $30; $40