When two or more large companies in the same industry set prices or quantities i

Question

When two or more large companies in the same industry set prices or quantities in unison, economists refer to them as:

a. Monopolist competitors

b. A cartel

c. Dominant firms

d. Perfect competitors

e. Jerks

5. According to our discussion, oligopoly markets will generally result in the same price and quantity as we would observe in a monopoly market

. a. True

b. False

The example of the prisoner’s dilemma is primarily meant to demonstrate

a. The difficulty of maintaining cooperation in decisions that involve strategic interdependence

b. The concept that each person looking out for his or her own best interests results in the best overall outcome for the group involved in the decision

c. The benefits of government regulation in a non-competitive market

d. What happens to snitches

A Nash equilibrium is

a. The outcome that maximizes the payoff of all players

b. Never achieved without cooperation between players

c. The outcome in which no player can improve their payoff by changing his or her strategy, (given the strategy of the other player)

d. All of the above

Explanation / Answer

1.Cartel-In economics, a cartel is an agreement between competing firms to control prices or exclude entry of a new competitor in a market. It is a formal organization of sellers or buyers that agree to fix selling prices, purchase prices, or reduce production using a variety of tactics.

2.true

3.the concept of each person looking out for his or own best results in the best overall outcome for the group involved in the decision

4. Nash equilibrium is the outcome of in which no player can improve their payoff by changing his or her strategy ( given the strategy of other player )

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