Exam 12: Between Competition and Monopoly

In the past, the Department of Transportation allowed airline mergers that gave the merged airlines market shares of 79 and 82 percent, respectively, in their hub cities.The concept the DOT used to allow mergers where there was obvious concentration was most likely

Cartels are relatively rare because

Price leadership may sometimes be an example of covert collusive behavior by oligopolies.

Economists tend to be concerned about entry barriers.Why are entry barriers so important?

Monopolistic competition is different from perfect competition in that every manufacturer

The kinked demand curve is an explanation of sticky prices.

Sales maximization and profit maximization are essentially equivalent.

Sales maximization by a firm most often serves the interests of the firm's

Monopolistic competition in long-run equilibrium is characterized by

Some oligopolies may try to maximize sales revenue rather than maximize profits.

Which of the following is never true for a sales revenue maximizer with an upward-sloping supply curve?

The monopolistically competitive firm in short-run equilibrium

Under perfect competition and monopolistic competition, profits are zero in long-run equilibrium.

The kinked demand curve model is based on the assumption that rival firms will match a price cut but ignore a price increase.

A cartel is

To maximize its profit, a monopolistically competitive firm produces at the output level at which

In reality, firms may seek to maximize

The apparent stickiness of the price of goods sold by oligopolists can be explained by the

There are generally, in most areas, a large number of qualified physicians whose services are highly personalized.In addition to price, factors such as age, sex, location, and personality influence the choice of physician.Thus, the market is best described as

Average cost is higher with a monopolistically competitive firm than with a perfectly competitive firm.