Oligopoly

Question 1

Firms must take the potential reaction of its closest rivals into account when making its own decisions

Answer 1

Interdependence

Question 2

The market is characterized by imperfect knowledge, where costumers don’t know the best price or availability

Answer 2

Information

Question 3

This is used to explain the price inflexibility in an oligopolistic market

Answer 3

Sweezy’s model

Question 4

This is used when firms produce identical or standardized product and don’t collude

Answer 4

Cournot model

Question 5

In this model, one firm serves as the industry leader

Answer 5

Stackelberg model

Question 6

This model examines price competition among firms that produce highly substitutable goods

Answer 6

Bertrand duopoly market

Question 7

This type of collusion occurs when firms try to hide the results of their collusion

Answer 7

Covert

Question 8

This collusion arises when firm act together, but there is no agreement among firms

Answer 8

Tacit

Question 9

This is an analytical guide or tool for making decisions in situations involving interdependence

Answer 9

Game theory

Question 10

One player’s gain is another player’s loss (ex. a costumer buys from one firm and not the other)

Answer 10

Zero-sum games

Question 11

These are games with the potential for mutual profit (ex. when two nations trade goods and services)

Answer 11

Positive-sum games

Question 12

These are games with the potential for mutual loss (ex. when diplomatic relations between countries fail and there is a war)

Answer 12

Negative-sum games

Question 13

In this game, players make their decisions at the same time (ex. rock paper scissors game)

Answer 13

Simultaneous-move games

Question 14

In this game, one player move first, then the other person gets to respond (ex. tictac toe and chess)

Answer 14

Sequential-move games

Question 15

This game is played only oncrr, and is not repeated by the other players

Answer 15

One-shot games

Question 16

In this game, players know that the game is played again over a time period

Answer 16

Repeated games

Question 17

This is a type of strategy where the player attempts to earn a maximum possible benefit available

Answer 17

Maximax

Question 18

This strategy is where a player chooses the best of the worst pay-off

Answer 18

Maximin

Question 19

It is the best outcome irrespective of what the other player chooses

Answer 19

Dominant strategy

Question 20

This isba solution to a game involving two or more players who want the best outcome for themselves and must take the actions of others into account

Answer 20

Nash equilibrium