Question 1

What is a Nash equilibrium?

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Question 2

Explain the different sources of negative network externalities.

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Question 3

Pepsi is considering an expensive advertising campaign to steal market share from Coca-Cola.Why might both companies have a dominant strategy to advertise,even if advertising attracts few new customers to the cola drink industry?

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Question 4

What impact would easy entry have on the profitability of oligopolies?

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Question 5

A group of firms,operating in collusion,incur costs of production of $15 per unit.The price that currently maximizes their profit is $19.Knowing that potential competitors could enter the market with production costs of $17 per unit,what price are the colluders likely to charge? Why?

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Question 6

How do economies of scale result in barriers to entry into oligopoly models?

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Quiz 15: Oligopoly and Strategic Behavior