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- 1. Multiple Choice
Oligopoly is a market structure characterized by:
independence in decision making
regulated natural monopolies
substantial diseconomies of scale
a large number of small firms
strategic behavior between rival firms
- 2. Multiple Choice
Oligopoly is a market structure that is characterized by a _____ number of ______ firms that produce _____ products.
large; relatively small, independent; identical
small; independent; identical or differentiated
large; relatively small, independent; differentiated
small; independent; differentiated
small; interdependent; identical or differentiated
- 3. Multiple Choice
An extreme case of oligopoly in which firms collude to raise joint profits is known as a:
duopoly
cartel
dominant producer
price war
price leadership
- 4. Multiple Choice
When firms openly agree on price, output, and other decisions aimed at achieving monopoly profits, those firms are practicing
overt collusion
tacit collusion
price leadership
price-taking behavior
price discrimination
- 5. Multiple Choice
In which of the following market structures is it sometimes assumed that rival firms will match price decreases but not match price increases?
Perfect competition
Oligopoly
Natural Monopoly
Monopolistic Competition
Monopoly
- 6. Multiple Choice
The cartel model of oligopoly predicts that
all firms in the industry act in unison to set monopoly price
each producer acts independently of others
firms follow the low-price firm in the industry
differences in cost of production discourage individual firms from cheating
the markup on marginal cost should be the same for all firms
- 7. Multiple Choice
Collusion, price leadership, and price wars are usually observed in which of the following market structures?
Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly
Natural Monopoly
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