916 917 918 In an oligopoly there are many sellers Incorrect there are no barriers to entry Incorrect firms recognize their interdependence True Answer Correct total surplus is maximized Incorrect The most important source of oligopoly in an industry is economies of scale True Answer Correct government regulation Incorrect technological inferiority Incorrect ownership of plentiful resources Incorrect An industry that is dominated by a few firms each of whose firms recognizes that its own choices can affect the choices of its rivals and vice versa is a monopoly Incorrect an oligopoly True Answer Correct characterized by monopolistic competition Incorrect characterized by perfect competition Incorrect 919 Oligopoly is a market structure that is characterized by a small number of interdependent firms producing identical or differentiated products True Answer Correct small number of independent firms producing identical or differentiated products Incorrect large number of relatively small independent firms producing differentiated products Incorrect large number of relatively small independent firms producing identical products Incorrect 920 To be called an oligopoly an industry must have independence in decision making Incorrect a horizontal demand curve Incorrect a small number of interdependent firms True Answer Correct relatively easy entry and exit Incorrect 921 Oligopoly is a market structure characterized by independence in decision making Incorrect uncertainty about the behavior of rival firms True Answer Correct substantial diseconomies of scale Incorrect a large number of small firms Incorrect The market structure characterized by a few interdependent firms and barriers to entry is called monopolistic competition Incorrect perfect competition Incorrect oligopoly True Answer Correct monopoly Incorrect 923 In oligopoly a firm must realize that and that the of its rivals will affect it what it does has no effect on the other firms in the industry Incorrect its behavior will be ignored by other firms in the industry Incorrect another major firm may dominate choices in the industry and it will need to behave accordingly True Answer Correct collusion was made legal in 2004 Incorrect A firm that is in an oligopoly knows that its affect its actions rivals reactions True Answer Correct price changes total revenue in a positive way reactions Incorrect actions rarely rivals actions Incorrect price increases total revenue in the long run only large but not small price changes Incorrect The market structure that is characterized by only a small number of producers is referred to as a n oligopoly True Answer Correct perfect competition Incorrect 922 924 925 927 To calculate the Herfindahl Hirschman index HHI one must 926 928 929 monopoly Incorrect monopolistic competition Incorrect Which of the following scenarios best describes an oligopolistic industry A single cable company serves customers in a small town Incorrect Thousands of soybean farmers sell their output in a global commodities market Incorrect Coca Cola and Pepsi sell most of the soft drinks consumed around the world True Answer Correct A college has one bookstore selling textbooks to students Incorrect sum the market shares of the four largest firms in the industry Incorrect sum the market shares of all of the firms in the industry Incorrect divide the market share of the largest firm by the sum of the four largest firms in the industry Incorrect sum the squared market shares of all firms in the industry True Answer Correct An industry is dominated by a few firms Each of these firms acknowledges that its own choices affect the choices of its rivals Each firm also recognizes that its rivals choices affect the decisions it makes This industry is an example of a monopoly Incorrect an oligopoly True Answer Correct monopolistic competition Incorrect perfect competition Incorrect Oligopoly is a market structure that is characterized by a products large relatively small and independent identical Incorrect small independent identical or differentiated Incorrect large relatively small and independent differentiated Incorrect small interdependent identical or differentiated True number of firms that produce 930 931 932 933 934 Answer Correct An industry characterized by a few interdependent firms and by barriers to entry is called perfect competition Incorrect monopolistic competition Incorrect monopoly Incorrect oligopoly True Answer Correct The sum of the squared market shares of each firm in an industry is the concentration ratio Incorrect employment rate Incorrect Herfindahl Hirschman index True Answer Correct market number Incorrect A monopoly will have a Herfindahl Hirschman index HHI equal to 1 Incorrect 100 Incorrect 1 000 Incorrect 10 000 True Answer Correct Which of the following Herfindahl Hirschman indices is most likely to indicate a perfectly competitive market 100 True Answer Correct 1 800 Incorrect 10 000 Incorrect 100 000 Incorrect The Herfindahl Hirschman index is a measure of concentration found by squaring the percentage market share of each firm in the industry Incorrect squaring the percentage market share of each firm in the industry and then summing the squared market shares True Answer Correct summing the percentage market shares of each firm in the industry Incorrect squaring the sums of the concentration ratios found in an 935 936 937 938 939 have has of the market industry survey of the largest four and largest eight firms Incorrect The largest HHI possible is and the industry is a n 10 monopoly Incorrect 10 000 monopoly True Answer Correct 100 000 monopoly Incorrect 100 000 oligopoly Incorrect The Herfindahl Hirschman index equals when 10 000 four firms each 25 Incorrect 5 000 three firms each 50 Incorrect 5 000 two firms each 50 True Answer Correct 100 000 one firm 100 Incorrect Large barriers to entry in the gas station business explain why the two only gas stations in a small town can earn an economic profit in the long run True Answer Correct must produce at the minimum average total cost in the long run Incorrect have no fixed costs in the long run Incorrect must produce a level of output such that MR MC in order to maximize their profit Incorrect An industry with only two firms is generally called a monopoly Incorrect monopolistic competition Incorrect a duopoly True Answer Correct perfect competition Incorrect A duopoly is an industry that consists of a single firm Incorrect two firms True Answer
View Full Document
Unlocking...