True or false
15) Microsoft was charged with violating the antitrust laws
not because it had a virtual monopoly in the form of its Windows
operating system, but because it acted like a monopolist in trying
to control the market for certain software applications.
Answer:
16) Mutual interdependence among firms is one of the key
characteristics of an oligopoly market that distinguishes it from
the other three major market structures.
Answer:
17) One of the surprising conclusions of many of the
noncooperative models of oligopoly is that firms end up better off
with the noncooperative outcome than they would by cooperating with
one another.
Answer:
18) In the prisoner's dilemma game, each player's dominant
strategy is also the Nash equilibrium.
Answer:
19) Because there is no formal agreement among the
participating firms, firms that engage in tacit collusion are
exempt from prosecution under the anti-trust laws.
Answer:
20) A firm acting as a price leader would never reduce market
price because this would clearly make all of the firms in the
market worse off and defeat the purpose of having a firm act as the
price leader.
Answer:
21) Applying a uniform markup to set the price of the various
products sold by a firm is more profitable than varying the markup
based on differences in the price elasticity of demand for the
firm's products.
Answer:
22) In the case of a perfectly competitive firm, the optimal
markup over marginal cost is 0 percent.
Answer:
23) Unlike markup pricing, the strategy of price
discrimination is totally independent of the price elasticity of
demand for the good in question.
Answer:
24) The goal of "personalized pricing" is to determine how
much each individual customer is willing to pay for a product. As
such, it is an application of first-degree price
discrimination.
Answer:
25) When the macroeconomy is doing poorly (as it was in 2009),
profits of existing firms decrease, creating an incentive for
existing firms to exit unprofitable markets. This in turn makes it
more difficult for the remaining firms to mark-up price over
average or marginal cost.
Answer: