Game theory is useful to analyze oligopoly markets because
a. each firm is a price taker
b. the market is comprised of a single firm.
c. the firms in the market engage in strategic behavior.
d. each firm produces a differentiated product.
c
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A perfectly competitive firm may, under some circumstances, be able to affect the market price.
Answer the following statement true (T) or false (F)
Consider a large public university in which a chemistry lecture is usually attended by 300 students or so but with large amounts of available seats on any given day
Is this a pure public good? If not, why not? Is this good likely to be provided in an efficient manner if the professor is vigilant in making sure that only registered students attend? Explain.
A cartel might fail because
A) it does not control enough of the output in a market to raise prices enough. B) there is an incentive for members to cheat. C) too many firms leave the cartel, causing the cartel price to fall. D) All of the above.
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the variable cost?
A) 200 B) 5Q C) 5 D) 5 + (200/Q) E) none of the above