A tit-for-tat strategy is one in which oligopolies
A) cooperate as long as other members cooperate, but if anyone cheats, they cut the price until the cheater reverts to cooperation.
B) cooperate almost all of the time, but occasionally do not cooperate in order to fool the antitrust authorities.
C) keep cutting prices to punish rivals until the competitive price is reached.
D) try to avoid the problems of the prisoners' dilemma, but actually make themselves worse off.
Answer: A
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In what way does long-run equilibrium under monopolistic competition differ from long-run equilibrium under perfect competition?
A) Firms in perfect competition achieve allocative efficiency while firms in monopolistic competition achieve brand efficiency. B) Firms in perfect competition achieve productive and allocative efficiency while firms in monopolistic competition achieve neither allocative nor productive efficiency. C) The only difference is that in a monopolistically competitive market there are many brands to choose from while in a perfectly competitive market there is one standard product. D) Firms in perfect competition achieve productive efficiency while firms in monopolistic competition achieve allocative efficiency.