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- 1. Multiple ChoiceAn industry that is dominated by a few large firms ismonopolistic competition.a monopoly.perfect competition.an oligopoly.
- 2. Multiple Choiceconspiring among business to set the prices of competing productionpricing fixingtrustmarket shareoligopoly
- 3. Multiple ChoiceThis is an illegal practice of an oligopoly working together to set prices.collusionmonopolistic competitioncompetitive pricingpriceline negotiation
- 4. Multiple ChoiceThe most recognizable form of non-price competition is?More LocationsBetter Customer ServiceAdvertisingLow Price
- 5. Multiple ChoiceWhich of the following usually results from colluding firms?more is producedprofit decreasesprices are highermore firms enter the market
- 6. Multiple ChoiceThe characteristic of oligopolistic firms that makes them different from all other types of firms is that oligopolistic firms:Advertise their productsConsider each other's decisionsProduce differentiated productsFace high barriers to entry
- 7. Multiple Choice
The goal of a company in an oligopoly industry is to
Increase market share and profits.
Obtain the highest price possible.
Always follow rivals if they raise price.
Be the market leader in innovation.
- 8. Multiple Choice
A kinked demand curve indicates that rival oligopolists match all
Increased advertising.
Advertising reductions.
Price increases.
Price reductions.
- 9. Multiple Choice
The study of how decisions are made when strategic interaction between firms exists is known as
Game theory.
Contestable market theory.
Market power theory.
Predatory pricing theory.
- 10. Multiple Choice
The following table shows the profits associated with the pricing strategies of two oligopolistic firms, Agronomia and Farmingdale. Each firm has two possible strategies: to charge a low price or a high price. The first entry in each cell shows the profits to Agronomia and the second the profits to Farmingdale. If the two firms do not cooperate, what will be the profit for each firm?Agronomia = $50; Farmingdale = $100Agronomia = $150; Farmingdale = $150Agronomia = $300; Farmindale = $50Agronomia = $100; Farmingdale = $100 - 11. Multiple ChoiceE Soda and R Soda are the only two firms in
the soft-drink industry. The companies cannot cooperate. Each firm can follow a high-price strategy or a low-price strategy for pricing its product. In the payoff, the first entry in each cell shows the profits to E Soda and the second entry shows the profits to R Soda. It can be concluded that:neither E Soda nor R Soda has a dominant strategyE Soda has a dominant strategy but R Soda does notBoth firms will choose the high-price strategyBoth firms will choose the low-price strategy - 12. Multiple ChoiceEvergreen and Nature View are bidding for
a landscaping contract. The payoff matrix shows what each firm’s total weekly profits from all its operations will be for each combination of bids. The first entry in each cell shows Evergreen’s profit, and the second entry in each cell shows Nature View’s profit. A Nash equilibrium results under which of the following conditions?When both firms bid lowWhen Evergreen bids high and Nature View bids lowWhen both firms bid high and when both firms bid lowWhen Evergreen bids low, no matter what Nature View’s bid is - 13. Multiple ChoiceWhich of the following best describes an oligopolistic market?Many sellers with identical products and no barriers to entryNo competition among sellers and high barriers to entryA few competing sellers with similar products and high barriers to entryA few competing sellers of identical products and no barriers to entry
- 14. Multiple ChoiceThe payoff matrix shows the per-unit profits associated with the production strategies of two utility companies, UA and UB. Each firm has two choices: to reduce production by 10 percent or by 20 percent. The first entry in each cell indicates the profits to UA, and the second, the profits to UB. Assuming no cooperation, which statement is true?Neither company has a dominant strategyBoth companies have an incentive to reduce production by 10%
Both companies have an incentive to reduce production by 20%
Only UA has an incentive to reduce production by 20%
- 15. Multiple ChoiceThe table shows the profits associated with the strategies of two oligopolistic firms, Lock and Star, that must choose between a high price and a low price for their products. The first entry in each box is the profits received by Lock, and the second entry is the profits received by Star. If Lock chooses low price, Star should charge the:high price and earn a profit of $70high price and earn a profit of $50low price and earn a profit of $40low price and earn a profit of $50
- 16. Multiple ChoiceThe cartel model of oligopoly predicts that:all the firms in the industry act in unison to set a monopoly priceeach producer acts independently of othersfirms follow the low-price firm in the industry
differences in cost of production discourage individual firms from cheating
- 17. Multiple ChoiceThe characteristic of oligopolistic firms that makes them different from all other types of firms is that oligopolistic firms:Advertise their productsConsider each other's decisionsProduce differentiated productsFace high barriers to entry
- 18. Multiple ChoiceAn industry that is dominated by a few large firms ismonopolistic competition.a monopoly.perfect competition.an oligopoly.
- 19. Multiple ChoiceThe soda market would be which type of market structure?monopolyoligopolyperfect competitionmonopolistic competition
- 20. Multiple ChoiceA formal organization of sellers or producers who regulate the production, pricing, and marketing of a productImperfect competitionMonopolyCartelMarket structure
- 21. Multiple ChoiceAn agreement among or between competing business to divide up in a marketmarket allocationpredatory pricingcease and orderpublic discourse
- 22. Multiple Choice"Senior discounts" would be an example of...predatory pricingprice discriminationfringe benefitsnon-price competition
- 23. Multiple ChoiceIn 1982, this company was broken into several smaller companies by the governmentMicrosoftAmerican ExpressAT&TPBS
- 24. Multiple ChoiceThe most familiar international cartel is...NAFTAOPECNEXISEU
- 25. Multiple ChoicePepsi, Coca ColaOligopolyMonopolyPerfect Competition
- 26. Multiple ChoiceWhat would be an example of a type of a NATURAL monopoly?NFLcity water companyCoca-Cola in a schoolCBS station in Indy
- 27. Multiple ChoiceUnder which market structure can two firms work together to set high prices?monopolyperfect competitionmonopolistic competitionoligopoly
- 28. Multiple ChoiceThe marginal cost curve typically does which of the following?Increases at a fixed rate.Decreases and eventually increases.Decreases at a decreasing rate.Increases and eventually decreases.
- 29. Multiple ChoiceThe term for costs that cannot be avoided in the short runTotal CostFixed CostAverage CostVariable Cost
- 30. Multiple ChoiceTerm for costs that change with productionFixed CostAverage CostVariable CostMarginal Cost
- 31. Multiple ChoiceExtra cost of producing one more unitMarginal costVariable CostFixed CostAverage Cost
- 32. Multiple ChoiceATC x ___=TCVariable CostQuantityPriceNone of the Above
- 33. Multiple ChoiceWhat is the only curve that continues to fall as output increases?Average Fixed CostAverage Variable CostAverage Total CostMarginal Cost
- 34. Multiple ChoiceThese costs are calculate by diving the cost by the outputFixed CostAverage CostTotal CostVariable Cost
- 35. Multiple Choice
Which is not a characteristic of an oligopoly
Few producers in a market
Similar products
High barriers to enter
one producer in the market
- 36. Multiple ChoiceAn Oligopoly is a market that has many producers and relatively low barriers.TrueFalse
- 37. Multiple ChoiceCollusion is legal in the U.S.?TrueFalse
- 38. Multiple ChoiceEven if people or companies rationally follow their own self-interest the best outcome is hard to reach when they can't or don't cooperate. This is known as?Game TheoryAbsolute AdvantageComparative AdvantageFree Rider Problem
- 39. Multiple ChoiceCompetition promotes innovation.TrueFalse
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