Question 1

In oligopoly, minimum efficient scale is large relative to the market.

Accepted Answer

A) True 
 B)False

Question 2

Monopolistic competition is similar to

Accepted Answer

A)   perfect competition because the firms face downward-sloping demand curves and can earn only a normal profit in the long run
B)   pure monopoly because the firms face downward-sloping demand curves and can earn only a normal profit in the long run
C)   perfect competition because the firms face downward-sloping demand curves and similar to pure monopoly in that the firms can earn only a normal profit in the long run
D)   pure monopoly because the firms face downward-sloping demand curves and similar to perfect competition in that the firms can earn only a normal profit in the long run
E)   pure monopoly because the firms face downward-sloping demand curves and can earn an economic profit in the long run

Question 3

Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run, monopolistically competitive firms will not

Accepted Answer

A)   operate where price equals marginal cost
B)   charge a higher price than firms in perfect competition
C)   produce a smaller quantity than firms in perfect competition
D)   produce where price equals average total cost
E)   exit when demand falls below long-run average costs

Question 4

A cartel is

Accepted Answer

A)   explicit collusion
B)   a conglomerate merger
C)   a horizontal merger
D)   legal in the United States
E)   implicit collusion

Question 5

To maximize cartel profit, the members must allocate output so that the marginal cost for the final unit produced by each firm is

Accepted Answer

A)   identical
B)   unequal
C)   negative
D)   equal to the firm's average total cost
E)   maximized

Question 6

Which oligopoly model was developed to explain price wars in an industry?

Accepted Answer

A)   natural oligopolies
B)   cartels
C)   price leadership by a dominant firm
D)   game theory
E)   cost-plus theory

Exam 10: Monopolistic Competition and Oligopoly

Monopolistic competition is similar to

Correct Answer
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In oligopoly, minimum efficient scale is large relative to the market.

Correct Answer
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To maximize cartel profit, the members must allocate output so that the marginal cost for the final unit produced by each firm is

Correct Answer
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Which oligopoly model was developed to explain price wars in an industry?

Correct Answer
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A cartel is

Correct Answer
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Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run, monopolistically competitive firms will not

Correct Answer
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Exam 10: Monopolistic Competition and Oligopoly

Monopolistic competition is similar to

Correct AnswerverifiedShow Answer

In oligopoly, minimum efficient scale is large relative to the market.

Correct AnswerverifiedShow Answer

To maximize cartel profit, the members must allocate output so that the marginal cost for the final unit produced by each firm is

Correct AnswerverifiedShow Answer

Which oligopoly model was developed to explain price wars in an industry?

Correct AnswerverifiedShow Answer

A cartel is

Correct AnswerverifiedShow Answer

Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run, monopolistically competitive firms will not

Correct AnswerverifiedShow Answer

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