True or false: price guarantees (offers by firms to match any lower prices discovered at other stores) result in low prices in an oligopoly. Explain your answer.
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- What conditions may permit oligopolies to discriminate consumers?Suppose the figure to the right represents the market for a particular brand of shampoo, such as L'Oreal, Lancome, or Maybelline. Assume the market is monopolistically competitive and is in long-run equilibrium. How much excess capacity does the firm have? The monopolistically competitive firm's excess capacity is thousand bottles of shampoo. (Enter your response as an integer.) C Price and cost (per bottle) 2.00- Q 1.80- MC Q ATC 1.60- 1.40- 1.20- 1.00- 0.80- 0.60- 0.40- 0.20- 0.00+ 0 2 MR D 4 6 8 10 12 14 16 18 20 Quantity (shampoo bottles in thousands)A duopoly in which two identical firms are engaged in Bertrand competition will not distort prices from their competitive levels.
- Explain if excess profit will exist in the long run for an oligopolistic market.Consider a monopolistically competitive market in long-run equilibrium, and a firm that is in the market. Suppose there is a shortage of a key input, so that every firm's ATC curve shifts up by a fixed amount. If the firm remains in the market in the new long-run equilibrium, what happens to the price at which it sells the good, and what quantity does it sell? Price goes down, quantity stays the same Price goes up, quantity stays the same Price goes down, quantity goes down Price goes up, quantity goes downOligopolies can continue to exist because of high barriers to entry. is this true or false
- Because of substantial barriers to entry, monopolistically competitive firms can easily earn long run economic profits. is this true or falseThe demand curve facing a firm in a monopolistically competitive market is more elastic than one facing a pure monopoly. True or False? Why?Are condominiums considered imperfect competition or perfect competition in the market? Identify its features and is it a monopoly, monopolistically competitive, or an oligopoly? Why? Please explain.
- For each statement in the left column find and match convenient part from the right column of the table: Write your answer A. The market, represented by a group of sellers, unified by an agreement on its segmentation and final price of the production, is considered as ... 1. ... for the oligopoly B. The situation in which society undergoes losses due to high prices and low output is more typical for ... 2 ... for the price discrimination C. The market in which several sellers can affect and control the price of products in an industry is typical for ... 3. ... for the price competition D. The situation when a different price is given for the same product is typical for ... 4. ... for the market of imperfect competition E. Limited resources is the main factor determining the situation typical for ... 5. ... for the perfect competition F. The absence of the supply curve is typical for... 6. ... for the cartel…Suppose you manage a firm in a monopolisticallycompetitive market. Which of the following strategies will do a better job of helping you maintaineconomic profits: obtaining a celebrity endorsement for your product or supporting the entry offirms that will compete directly with your biggestrival? Explain your answer.Candak Corporation produces professional quality digital cameras. The market for professional digital cameras is monopolistically competitive. Assume that the inverse demand curve faced by Candak (given its competitors’ prices) can be expressed as P = 5,000 - .2Q and Candak’s total costs can be expressed as TC = 20,000,000 + .05Q2. Answer the following questions. A. What price and quantity will Candak choose? B. Is this likely to be a long-run equilibrium for Candak Corporation? Why or why not? If not, what is likely to happen in the market for professional digital cameras, and how will it affect Candak?