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- 1. Multiple Choice
Which of the following best describes an oligopoly?
many monopolistically competitive firms
a few firms sharing monopoly power
a former monopoly that has been broken up by the government
a government-granted franchise or monopoly
- 2. Multiple Choice
Collusion most frequently occurs in industries that are
oligopolistic
monopolistically competitive
monopolistic
perfectly competitive
- 3. Multiple Choice
An oligopoly is a market structure in which many firms sell products that are similar but not identical
TRUE
FALSE
- 4. Multiple Choice
The market for crude oil is an example of an oligopolistic market
TRUE
FALSE
- 5. Multiple Choice
The unique feature of an oligopoly market is that the actions of one seller have a significant impact on the profits of all of the other sellers in the market
TRUE
FALSE
- 6. Multiple Choice
When oligopolists collude and form a cartel, the outcome in the market is similar to that generated by a perfectly competitive market
TRUE
FALSE
- 7. Multiple Choice
The greater the number of firms in the oligopoly, the more the outcome of the market looks like that generated by a monopoly
TRUE
FALSE
- 8. Multiple Choice
Cooperation is easily maintained in an oligopoly because cooperation maximizes each individual firm's profits
TRUE
FALSE
- 9. Multiple Choice
The dominant strategy for an oligopolist is to cooperate with the group and maintain low production regardless of what the other oligopolists do
TRUE
FALSE
- 10. Multiple Choice
If oligopolists engagein collusion and successfully form a cartel, the market outcome is
the same as if it were served by a monopoly
The same as if it were served by competitive firms
The same as if it were served by competitive firms
Known as Nash equilibrium
- 11. Multiple Choice
Suppose an oligopolist individually maximizes its profits. When calculating profits, if the output effect exceeds the price effect on the marginal unit of production, then the oligopolist
has maximized profits
shoud produce more units
should produce fewer units
should exit in the industry
- 12. Multiple Choice
As the number of sellers in an oligopoly grows larger, an oligopolistic market looks more like
a monopoly
a competitive market
a collusion solution
monopolistic market
- 13. Multiple Choice
When an oligopolit individually chooses its level of production to maximize its profits, it produces an output that is
More than the level produced by a monopoly and less than the level produced by a competitive market
Less than the level produced by a monopoly and more than the level produced by a competitive market
Less than the level produced by a monopoly and more than the level produced by a competitive market
Less than the price charged by either a monopoly of a competitive market
- 14. Multiple Choice
As the number of sellers in an oligopoly increases
Collusion is more likely to occur because of larger number of firms can place pressure on any firm that defects
Output in the market tends to fall because each firm must cut back on production
The price in the market moves further from marginal cost
The price in the market moves closer to marginal cost
- 15. Multiple Choice
Collusion is difficult for an oligopoly to maintain
Because antitrust laws make collusion illegal
Because, in the case of oligopoly, self-interest is in conflict with cooperation
If additional firms enter of the oligopoly
For all the above reasons
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