Question

Question 1 Which of the followings is correct according to what you learn in chapter Oligopoly?

options:

a. Monopoly output is higher than the market output in an oligopoly market.

b. Monopoly profit is higher than the total profit in an oligopoly market.

c. Monopoly price is lower than the price in an oligopoly market.

d. Monopoly outcome is more socially efficient than the outcome in an oligopoly market.

Question 2 In a Nash equilibrium:

options:

a. The joint payoff is the lowest

b. The joint payoff is maximized

c. Players can not be better off if they jointly change their strategies

d. No player could be better off given what the other players are doing

Question 3 In a Prisoner's dilemma game:

options:

a. Players will find it hard to cooperate

b. There is no dominant strategy

c. Players can maximize the total payoff out of self interest

d. Players will cooperate out of self interest

Question 4 In an oligopoly market, if one single firm produces more given other firms decisions unchanged: (Suppose the price is determined by the total output in the market.)

options:

a. All the other firms are negatively affected

b. Other firms may benefit

c. The impact on market price will be ignorable

d. The total profit increases

Answer 1

1. Monopoly profit is higher than the total profit in oligopoly market

Monopoly has a higher profit because unlike oligopoly that is no chance of a collusion among firms.

2. No player could be better off given what the other player is doing.

At this stage of a game of Nash equilibrium will be reached as no player will benefit in changing its individual strategy.

3. Players will find it hard to co-operate

In a prisoner's dilemma the games usually ends strategy which is not the best outcome individually or or in total.

4. Other forms will be negatively affected.

S7 price is fixed in oligopoly and the amount each form will produce is usually fixed but if one form to his to produce more than the state level the single form will profit and the rest in the oligopoly market will lose out.

(Please consider giving an upvote if you find it useful)