Chapter 14 Problem Set

A  limit the involvement of government in providing health care.

B  promote competition in the transportation industry.

C  promote international trade.

D  engage in monopoly pricing.

A  a large number of firms.

B  a large number of firms and the bargaining power of buyers.

C  simple products and pricing.

D  the bargaining power of buyers.

A  kinked demand curve model.

B  tit-for-tat strategy.

C  prisoners’ dilemma.

D  price leadership model.

A  independence in decision making.

B  relatively easy entry and exit.

C  a small number of interdependent firms.

D  a horizontal demand curve.

A  Antitrust policy

B  Price leadership

C  Nonprice competition

D  Tacit collusion

A  prices for tobacco products are more likely to be near the monopoly level than in an industry whose firms have similar costs.

B  they are less likely to engage in tacit collusion than firms with similar costs.

C  they are more likely to engage in tacit collusion than firms with similar costs.

D  output of tobacco products is more likely to be near the monopoly level than in an industry whose firms have similar costs.

A  oligopolistic.

B  monopolistic.

C  perfectly competitive.

D  monopolistically competitive.

A  trigger

B  dominant

C  tit-for-tat

D  competitive

A  Competition among a large number of small firms generates similar but slightly different prices.

B  Competition among a large number of small firms generates a stable market price.

C  Firms in an industry agree openly on price and output, and they jointly make other decisions aimed at achieving monopoly profits.

D  Smaller firms in an industry have an unspoken agreement to charge the same price as the largest firm.

A  be able to increase its profits initially.

B  find that the other firm has an increase in its profits alone.

C  find that cheating leads to a decrease in its profits alone.

D  find that cheating initially leads to an increase in both firms’ profits.

A  confess.

B  This game does not have a dominant strategy.

C  not confess.

D  confess only if the other confesses.