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Exam 13: Monopolistic Competition and Oligopoly

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Question 41

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

A) exceeds the Herfindahl index.
B) is less than the Herfindahl index.
C) is 40 percent or more.
D) is 15 percent or more.

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Question 42

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

A) P = MC = ATC.
B) MR = MC and minimum ATC > P.
C) MR > MC and P = minimum ATC.
D) MR = MC and P > minimum ATC.

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Question 43

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Under monopolistic competition,entry to the industry is:

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

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

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.

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

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

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

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

(Last Word) Microsoft:

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

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

A simultaneous game is said to exist when:

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

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:

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

Product variety is likely to be greater in:

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

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: