1. Oligopolists face interdependent profits because
a. there are few firms in the market.
b. the product is differentiated.
c. industry sales are large.
d. all of the above
2. Actions taken by oligopolists to plan for and react to actions of rival firms represent
a. strategic behavior.
b. interdependence.
c. cooperative behavior.
d. game theory.
e. all of the above.
3. In game theory, a dominant strategy is
a. a strategy used by a large firm to compete against smaller firms.
b. a strategy followed by the price leader.
c. a strategy involving a high risk but also a high return.
d. a strategy that leads to the best outcome no matter what a rival does.
e. none of the above
4. Which of the following is not an implication of oligopoly interdependence:
a. strategic behavior
b. the need to get into the heads of rival managers
c. making decisions that result in the equating of marginal revenue and marginal cost
d. thinking ahead in sequential decisions to anticipate rivals’ future actions.