Ch 17 Micro Review

5. An agreement among firms in a market about quantities to produce or prices to charge.
6. The study of how people behave in strategic situations.
8. As the number of firms in the market increases the price effect becomes _____.
11. Strengthened rights of individuals damaged by anticompetitive arrangements between firms.
12. A oligopoly with 2 firms.
14. Where firms interact with each other and choose the best strategies.
15. Where firms choose the best decision with thought given to what other firms may be doing.
16. But each firm has _________ to renege on the agreement.
18. Occurs when a firm cuts prices to prevent entry or drive a competitor out of the market.
19. If P > MC, increasing output raises profits.

1. A hypothetical which pits two suspects against each other with a choice to snitch on each other for a lesser sentence showing the effects of game theory.
2. When firms in an oligopoly individually choose production to ________ profit.
3. Forbids collusion between competitors.
4. The ______ the concentration ratio, the less competition.
5. Both firms would be better off if they stuck to the ______ ________.
7. Occurs when a manufacturer imposes lower limits on the prices retailers can charge.
9. A group of firms acting in unison.
10. The percentage of the market’s total output supplied by its four largest firms.
13. A market structure in which only a few sellers offer similar or identical products.
17. Raising output increases the market quantity, which reduces the price and reduces profit on all units sold.