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Exam 13: Monopolistic Competition and Oligopoly

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Question 41

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If the firms in an oligopolistic industry can establish an effective cartel,the resulting output and price will approximate those of:

A) a purely competitive producer.
B) a pure monopoly.
C) a monopolistically competitive producer.
D) an industry with a low four-firm concentration ratio.

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Question 42

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In the long run,a profit-maximizing monopolistically competitive firm sets it price:

A) above marginal cost.
B) below marginal cost.
C) equal to marginal revenue.
D) equal to marginal cost.

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Question 43

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Generally speaking,oligopolistic industries producing raw materials and semifinished goods usually offer differentiated products,while oligopolists producing consumer goods usually offer standardized products.

Which of the following nations is not a member of the OPEC oil cartel?

Answer the question on the basis of the following demand and cost data for a specific firm: $\begin{array}{c}\underline{\text { Demand Data}}\quad\quad\quad\quad\quad\underline{\text { Cost Data}} \\\begin{array}{c}\text { (1) }\\\underline{\text { Price } }\\ \$ 11.00 \\9.99 \\9.00 \\8.00 \\7.10 \\6.00 \\5.15\end{array}\begin{array}{c}\text { (2) }\\\underline{\text { Price}}\\\$ 10.00 \\8.85\\8.00\\7.00\\6.10\\5.00\\4.15\end{array}\begin{array}{c}\text { (3) }\\\underline{\text { Quantity}}\\6 \\7 \\8 \\9 \\10 \\11 \\12\end{array}\begin{array}{c}\\\underline{\text { Output }} \\6 \\7 \\8 \\9 \\10 \\11 \\12 \end{array}\begin{array}{c}\text { Total}\\\underline{\text { Cost}} \\ \$ 61 \\62 \\64 \\67 \\72 \\79 \\86\end{array}\end{array}$ Refer to the data.Suppose that entry into the industry changes this firm's demand schedule from columns (1) and (3) shown to columns (2) and (3) .Economic profit will:

The four-firm sales concentration ratio for an industry measures the:

The price elasticity of a monopolistically competitive firm's demand curve varies:

When a monopolistically competitive firm is in long-run equilibrium:

A simultaneous game is said to exist when:

Under monopolistic competition,entry to the industry is:

As a general rule,oligopoly exists when the four-firm concentration ratio:

A significant difference between a monopolistically competitive firm and a purely competitive firm is that the:

(Last Word) Microsoft:

The economic profits earned by monopolistically competitive sellers are zero in the long run.

Product variety is likely to be greater in:

In repeated games,players may be willing to accept lower payoffs in the short run in exchange for greater net payoffs over the long run.

(Last Word) Which of the following statements best describes the Internet market structure?

Negative-sum games do not exist because neither player has an incentive to play the game.

Answer the question on the basis of the following demand and cost data for a specific firm: $\begin{array}{c}\underline{\text { Demand Data}}\quad\quad\quad\quad\quad\underline{\text { Cost Data}} \\\begin{array}{c}\text { (1) }\\\underline{\text { Price } }\\ \$ 11.00 \\9.99 \\9.00 \\8.00 \\7.10 \\6.00 \\5.15\end{array}\begin{array}{c}\text { (2) }\\\underline{\text { Price}}\\\$ 10.00 \\8.85\\8.00\\7.00\\6.10\\5.00\\4.15\end{array}\begin{array}{c}\text { (3) }\\\underline{\text { Quantity}}\\6 \\7 \\8 \\9 \\10 \\11 \\12\end{array}\begin{array}{c}\\\underline{\text { Output }} \\6 \\7 \\8 \\9 \\10 \\11 \\12 \end{array}\begin{array}{c}\text { Total}\\\underline{\text { Cost}} \\ \$ 61 \\62 \\64 \\67 \\72 \\79 \\86\end{array}\end{array}$ Refer to the data.If columns (1) and (3) of the demand data shown are this firm's demand schedule,economic profit will be:

The monopolistically competitive seller maximizes profit by producing at the point where: