SI-ECON 315- Models

Competitors match price decrease and not price increase

• Sweezy

• Cournot

• Bertrand

• Cartel

Is known as "Kinked Demand Curve" Model

• Cartel

• Sweezy

• Bertrand

• Contestable

Firms believe that competitors do not react to their actions

• Bertrand

• Contestable

• Cournot

• Cartel

One firm decides the output before the other firm

• Cartel

• Cournot

• Contestable

• Stackelberg

What is the sticky price on the Sweezy model

• Prices can be adjusted in the short run

• Where price is breakeven

• Prices can be adjusted in the long run

• prices cannot fully adjust in the short run.

Firms engage in price competitions/ Price wars

• Bertrand

• Cartel

• Cournot

• Sweezy

Firms have no market power

• Contestable

• Sweezy

• Bertrand

• Cournot

Two firms compete in a Stackelberg oligopoly. The inverse function is P= 15,000-8Q. The MC of the leader is $4760 and for the follower is $6040. What is the total output for this industry?

• 820

• 900

• 920

• 1020

In the Sweezy model of oligopoly, Starting at the sticky price, firms face more elastic demand if they raise their prices than if they lower their prices

• True

• False