Question 1

Monopolistically competitive firms are similar to perfectly competitive firms in the sense that both face horizontal demand curves for their product.

Accepted Answer

A) True 
 B)False

Question 2

U.S.antitrust enforcement policies have focused on

Accepted Answer

A) breaking up any firm with more than a 10 percent market share 
B) forcing firms to produce output at the point where P = MC 
C) preventing price-fixing arrangements 
D) preventing "golden parachutes" 
E) enforcing market codes of ethics 
A) breaking up any firm with more than a 10 percent market share 
B) forcing firms to produce output at the point where P = MC 
C) preventing price-fixing arrangements 
D) preventing "golden parachutes" 
E) enforcing market codes of ethics

Question 3

Which of the following best describes real-world U.S.markets?

Accepted Answer

A) In most markets,the firms face steep demand curves for their output. 
B) They combine characteristics of monopolistic competition,oligopoly,and monopoly. 
C) Effective competition exists in only about 25 percent of those markets. 
D) The dominant share of U.S.manufacturing output is produced by firms with the power to vary their prices over a wide range. 
E) Perfect competition is useful as a model for very few U.S.markets. 
A) In most markets,the firms face steep demand curves for their output. 
B) They combine characteristics of monopolistic competition,oligopoly,and monopoly. 
C) Effective competition exists in only about 25 percent of those markets. 
D) The dominant share of U.S.manufacturing output is produced by firms with the power to vary their prices over a wide range. 
E) Perfect competition is useful as a model for very few U.S.markets.

Question 4

As a result of advertising prices in monopolistic competition,are

Accepted Answer

A) higher because firms earn economic profits in the long run 
B) higher because increased output leads to higher production costs per unit 
C) lower if increased output allows lower average production costs per unit that more than offset the advertising costs 
D) lower if advertising costs per unit fall as output increases 
E) higher because advertising shifts each firm's demand curve to the right and make it flatter 
A) higher because firms earn economic profits in the long run 
B) higher because increased output leads to higher production costs per unit 
C) lower if increased output allows lower average production costs per unit that more than offset the advertising costs 
D) lower if advertising costs per unit fall as output increases 
E) higher because advertising shifts each firm's demand curve to the right and make it flatter

Question 5

Compared to the market demand curve,a demand curve facing a monopolistically competitive firm would be

Accepted Answer

A) more elastic. 
B) vertical. 
C) horizontal. 
D) the same as the market demand curve. 
E) less elastic. 
A) more elastic. 
B) vertical. 
C) horizontal. 
D) the same as the market demand curve. 
E) less elastic.

Question 6

Firms will have a greater incentive to cheat on a collusive agreement when

Accepted Answer

A) the number of sellers is relatively small 
B) total market sales are small 
C) the market is perfectly competitive 
D) demand is rapidly changing 
E) prices are known to all firms in the market 
A) the number of sellers is relatively small 
B) total market sales are small 
C) the market is perfectly competitive 
D) demand is rapidly changing 
E) prices are known to all firms in the market

Question 7

Which of the following is an example of nonprice competition?

Accepted Answer

A) giving coupons for 10 percent discounts to potential customers 
B) having a Memorial Day Sale 
C) lowering the price on several selected brands 
D) offering a product in three colors-blue,green,and red-in addition to the standard black 
E) increasing the price on all products 
A) giving coupons for 10 percent discounts to potential customers 
B) having a Memorial Day Sale 
C) lowering the price on several selected brands 
D) offering a product in three colors-blue,green,and red-in addition to the standard black 
E) increasing the price on all products

Question 8

All of the following are examples of barriers to entry,except one.Which is the exception?

Accepted Answer

A) significant economies of scale 
B) reputation of established firms 
C) special deals with distributors 
D) excessive prices 
E) patents 
A) significant economies of scale 
B) reputation of established firms 
C) special deals with distributors 
D) excessive prices 
E) patents

Question 9

The airline and long-distance telephone service industries are examples of

Accepted Answer

A) monopolistic competition 
B) monopolies 
C) oligopolies 
D) perfect competition 
E) oligopolistic competition 
A) monopolistic competition 
B) monopolies 
C) oligopolies 
D) perfect competition 
E) oligopolistic competition

Question 10

One explanation for why oligopolies exist is that

Accepted Answer

A) it is easier to regulate a smaller number of firms 
B) minimum efficient scale is small relative to the market,allowing a large number of firms to achieve minimum long-run average total cost 
C) minimum efficient scale is large relative to the market,allowing only a few firms to achieve minimum long-run average total cost 
D) minimum efficient scale may be greater than the market quantity demanded at the price equal to minimum long-run average total cost 
E) competitive pricing drives firms from the market 
A) it is easier to regulate a smaller number of firms 
B) minimum efficient scale is small relative to the market,allowing a large number of firms to achieve minimum long-run average total cost 
C) minimum efficient scale is large relative to the market,allowing only a few firms to achieve minimum long-run average total cost 
D) minimum efficient scale may be greater than the market quantity demanded at the price equal to minimum long-run average total cost 
E) competitive pricing drives firms from the market

Question 11

-The firm depicted in Figure 11-15 is one of three identical noncollusive oligopolists in an industry,where each charges price P₂ and sells Q₃.If the three firms form a cartel,the price and output combination for this firm will involve a

Accepted Answer

A) higher price and lower output 
B) higher price and higher output 
C) higher price and the same output 
D) lower price and more output 
E) lower price and the same output 
A) higher price and lower output 
B) higher price and higher output 
C) higher price and the same output 
D) lower price and more output 
E) lower price and the same output

Question 12

In order for a market to be classified as an oligopoly,

Accepted Answer

A) there must be fewer than 10 firms 
B) the four largest firms must have 90 percent of the market 
C) there must be fewer than 5 firms 
D) the firms must be strategically interacting 
E) the firms must be strategically independent 
A) there must be fewer than 10 firms 
B) the four largest firms must have 90 percent of the market 
C) there must be fewer than 5 firms 
D) the firms must be strategically interacting 
E) the firms must be strategically independent

Monopolistically competitive firms are similar to perfectly competitive firms in the sense that both face horizontal demand curves for their product.

U.S.antitrust enforcement policies have focused on

Which of the following best describes real-world U.S.markets?

As a result of advertising prices in monopolistic competition,are

Compared to the market demand curve,a demand curve facing a monopolistically competitive firm would be

Firms will have a greater incentive to cheat on a collusive agreement when

Which of the following is an example of nonprice competition?

All of the following are examples of barriers to entry,except one.Which is the exception?

The airline and long-distance telephone service industries are examples of

One explanation for why oligopolies exist is that

-The firm depicted in Figure 11-15 is one of three identical noncollusive oligopolists in an industry,where each charges price P₂ and sells Q₃.If the three firms form a cartel,the price and output combination for this firm will involve a

In order for a market to be classified as an oligopoly,

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 11: Monopolistic Competition and Oligopoly

Monopolistically competitive firms are similar to perfectly competitive firms in the sense that both face horizontal demand curves for their product.

U.S.antitrust enforcement policies have focused on

Which of the following best describes real-world U.S.markets?

As a result of advertising prices in monopolistic competition,are

Compared to the market demand curve,a demand curve facing a monopolistically competitive firm would be

Firms will have a greater incentive to cheat on a collusive agreement when

Which of the following is an example of nonprice competition?

All of the following are examples of barriers to entry,except one.Which is the exception?

The airline and long-distance telephone service industries are examples of

One explanation for why oligopolies exist is that

-The firm depicted in Figure 11-15 is one of three identical noncollusive oligopolists in an industry,where each charges price P₂ and sells Q₃.If the three firms form a cartel,the price and output combination for this firm will involve a

In order for a market to be classified as an oligopoly,

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters