Question 1

How,if at all,does the kinked demand curve model contribute to the theory of oligopoly pricing decisions?

Accepted Answer

The model does not tell us anything abou

Question 2

How has increased international competition changed antitrust policy in the United States?

Accepted Answer

Increased international competition has

Question 3

What standard of judgment was used to decide,and what was the outcome of the following cases:
(1)Standard Oil (1911)
(2)ALCOA (1945)

Accepted Answer

(1)The Standard Oil case was assessed us

Question 4

The higher the concentration ratio in a given industry, the:

Accepted Answer

A) closer the industry is to a perfectly competitive market structure. 
B) larger the market shares of the smallest four firms in the industry. 
C) closer the industry is to an oligopolistic or monopolistic type of market structure. 
D) smaller the market shares of the largest four firms in the industry. 
A) closer the industry is to a perfectly competitive market structure. 
B) larger the market shares of the smallest four firms in the industry. 
C) closer the industry is to an oligopolistic or monopolistic type of market structure. 
D) smaller the market shares of the largest four firms in the industry.

Question 5

Suppose there are only four airlines that service the air route between two cities. If there is a barrier to entering the market (such as a limited number of gates), the market is best characterized as:

Accepted Answer

A) a pure monopoly. 
B) monopolistically competitive. 
C) oligopolistic. 
D) perfectly competitive. 
A) a pure monopoly. 
B) monopolistically competitive. 
C) oligopolistic. 
D) perfectly competitive.

Question 6

The higher an industry's concentration ratio is, the more competitive the industry is.

Accepted Answer

A) True 
 B)False

Question 7

Suppose an oligopolistic firm assumes that its rivals will ignore a price increase but match a price cut. In this case, the firm perceives its demand curve to be:

Accepted Answer

A) kinked, being steeper above the going price than below. 
B) kinked, being steeper below the going price than above. 
C) linear, being less elastic at lower prices. 
D) linear, being more elastic at higher prices. 
A) kinked, being steeper above the going price than below. 
B) kinked, being steeper below the going price than above. 
C) linear, being less elastic at lower prices. 
D) linear, being more elastic at higher prices.

Question 8

Which of the following market structures does not have predictable price and output decisions at which the firms will arrive rationally?

Accepted Answer

A) Oligopoly 
B) Monopolistic competition 
C) Perfect competition 
D) Monopoly 
A) Oligopoly 
B) Monopolistic competition 
C) Perfect competition 
D) Monopoly

Question 9

The concentration ratio is defined as the:

Accepted Answer

A) percentage of industry output produced by a specific firm. 
B) percentage of total industry output produced by the top firms. 
C) squared value of the market shares of all the firms in an industry. 
D) squared value of the market shares of the largest four firms in the industry. 
A) percentage of industry output produced by a specific firm. 
B) percentage of total industry output produced by the top firms. 
C) squared value of the market shares of all the firms in an industry. 
D) squared value of the market shares of the largest four firms in the industry.

Question 10

What are three causes of the decline in U.S.antitrust enforcement?

Accepted Answer

Three causes for the decline in antitrus

Question 11

In breaking up the Standard Oil Company, the U.S. Supreme Court established that a company's violation of the Sherman Antitrust Act was determined by:

Accepted Answer

A) the structure of the industry. 
B) whether or not the firm engaged in "unfair business practices." 
C) the percentage of the market controlled by the firm. 
D) concentration ratios. 
A) the structure of the industry. 
B) whether or not the firm engaged in "unfair business practices." 
C) the percentage of the market controlled by the firm. 
D) concentration ratios.

Question 12

The Herfindahl index and the concentration ratio fail to give a complete picture of an economy's competitiveness because:

Accepted Answer

A) they measure each firm's share of sales rather than each firm's share of profits. 
B) many corporations are conglomerates, spanning a variety of different industries. 
C) they don't account for mergers within an industry. 
D) they are based on market share, not market size. 
A) they measure each firm's share of sales rather than each firm's share of profits. 
B) many corporations are conglomerates, spanning a variety of different industries. 
C) they don't account for mergers within an industry. 
D) they are based on market share, not market size.

Question 13

The central characteristic of oligopolistic industries is:

Accepted Answer

A) interdependent pricing decisions. 
B) flexible prices. 
C) price competition. 
D) few or no economies of scale. 
A) interdependent pricing decisions. 
B) flexible prices. 
C) price competition. 
D) few or no economies of scale.

Question 14

According to the kinked demand curve theory of sticky prices, in an oligopolistic market:

Accepted Answer

A) a price decrease by one firm will not be followed by the other firms. 
B) a price increase by one firm will be followed by the other firms. 
C) the kinked demand curve is inelastic in the upper portion and elastic in the lower portion of the curve. 
D) the kinked demand curve is elastic in the upper portion and inelastic in the lower portion of the curve. 
A) a price decrease by one firm will not be followed by the other firms. 
B) a price increase by one firm will be followed by the other firms. 
C) the kinked demand curve is inelastic in the upper portion and elastic in the lower portion of the curve. 
D) the kinked demand curve is elastic in the upper portion and inelastic in the lower portion of the curve.

Question 15

In the contestable market model, an oligopoly with no barriers to entry sets a:

Accepted Answer

A) monopoly price. 
B) price that significantly exceeds average total cost. 
C) price that is equal to average total cost. 
D) collusive price. 
A) monopoly price. 
B) price that significantly exceeds average total cost. 
C) price that is equal to average total cost. 
D) collusive price.

Question 16

Platform businesses tend to be:

Accepted Answer

A) natural oligopolies. 
B) natural monopolies. 
C) artificial oligopolies. 
D) artificial monopolies. 
A) natural oligopolies. 
B) natural monopolies. 
C) artificial oligopolies. 
D) artificial monopolies.

Question 17

Strategic decision making is most likely to occur in which market structure?

Accepted Answer

A) Monopolistic competition 
B) Oligopoly 
C) Perfect competition 
D) All firms engage in strategic decision making. 
A) Monopolistic competition 
B) Oligopoly 
C) Perfect competition 
D) All firms engage in strategic decision making.

Question 18

Over time both the judgment by performance and judgment by structure standards have been used in deciding antitrust cases in the U.S.Briefly trace the history of the application of these standards,including references to key cases as appropriate.

Accepted Answer

The judgment by performance was the firs

Question 19

What are the three main U.S.antitrust laws and the main provisions of each?

Accepted Answer

The three main U.S.antitrust laws are th

Question 20

If an industry has exactly 10 firms with identical sales, the four-firm concentration ratio must be:

Accepted Answer

A) 10. 
B) 40. 
C) 60. 
D) 90. 
A) 10. 
B) 40. 
C) 60. 
D) 90.

Exam 15: Oligopoly and Antitrust Policy

How,if at all,does the kinked demand curve model contribute to the theory of oligopoly pricing decisions?

How has increased international competition changed antitrust policy in the United States?

What standard of judgment was used to decide,and what was the outcome of the following cases: (1)Standard Oil (1911) (2)ALCOA (1945)

The higher the concentration ratio in a given industry, the:

Suppose there are only four airlines that service the air route between two cities. If there is a barrier to entering the market (such as a limited number of gates), the market is best characterized as:

The higher an industry's concentration ratio is, the more competitive the industry is.

Suppose an oligopolistic firm assumes that its rivals will ignore a price increase but match a price cut. In this case, the firm perceives its demand curve to be:

Which of the following market structures does not have predictable price and output decisions at which the firms will arrive rationally?

The concentration ratio is defined as the:

What are three causes of the decline in U.S.antitrust enforcement?

In breaking up the Standard Oil Company, the U.S. Supreme Court established that a company's violation of the Sherman Antitrust Act was determined by:

The Herfindahl index and the concentration ratio fail to give a complete picture of an economy's competitiveness because:

The central characteristic of oligopolistic industries is:

According to the kinked demand curve theory of sticky prices, in an oligopolistic market:

In the contestable market model, an oligopoly with no barriers to entry sets a:

Platform businesses tend to be:

Strategic decision making is most likely to occur in which market structure?

Over time both the judgment by performance and judgment by structure standards have been used in deciding antitrust cases in the U.S.Briefly trace the history of the application of these standards,including references to key cases as appropriate.

What are the three main U.S.antitrust laws and the main provisions of each?

If an industry has exactly 10 firms with identical sales, the four-firm concentration ratio must be:

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