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Quiz 8

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Question 1 (1 point)
For a firm in monopolistically competitive market equilibrium:
  1. MC ≤ AC
  2. MR ≥ AR
  3. MR = MC
  4. P ≥ AC
Question 2 (1 point)
In oligopoly equilibrium:
  1. MC = AC
  2. MC > AC
  3. MR = MC
  4. MC > AC
Question 3 (1 point)
A perfectly functioning cartel results in a(n):
  1. monopoly equilibrium
  2. oligopoly equilibrium
  3. perfectly competitive equilibrium
  4. monopolistically competitive equilibrium
Question 4 (1 point)
In both monopolistic competition and oligopoly markets:
  1. there is easy entry and exit
  2. consumers perceive differences among the products of various competitors
  3. economic profits may be earned in the long run
  4. there are many sellers
Question 5 (1 point)
When prices in monopolistically competitive markets exceed those in a perfectly competitive equilibrium, this difference is the cost of:
  1. information
  2. market power
  3. inefficiency
  4. product differentiation
Question 6 (1 point)
Monopolistic competition always entails:
  1. declining LRAC
  2. vigorous price competition
  3. increasing LRAC
  4. constant LRAC
Question 7 (1 point)
Monopolistic competition is characterized by:
  1. homogeneous products
  2. barriers to entry and exit
  3. perfect dissemination of information
  4. few buyers and sellers
Question 8 (1 point)
In a monopolistically competitive industry, firms:
  1. offer products that are not perfect substitutes
  2. make decisions in light of expected reactions from other firms
  3. set price equal to marginal cost
  4. are price takers
Question 9 (1 point)
The demand curve faced by a firm in a monopolistically competitive industry is:
  1. the downward sloping industry demand curve
  2. downward sloping
  3. more elastic than the perfectly competitive firm's demand curve
  4. horizontal
Question 10 (1 point)
A perfectly functioning cartel leads to a price/output combination identical to an industry that is:
  1. monopolistic
  2. monopolistically competitive
  3. oligopolistic
  4. perfectly competitive
Question 11 (1 point)
An formal agreement to set prices and output is called:
  1. collusion
  2. monopolistic competition
  3. kinked demand
  4. a cartel
Question 12 (1 point)
The demand faced by an industry price leader is:
  1. market demand
  2. market demand plus the demand for output by follower firms
  3. market demand less the supply of output by follower firms
  4. kinked
Question 13 (1 point)
The industry supply curve is derived through the horizontal summation of firm:
  1. average cost curves
  2. marginal revenue curves
  3. marginal cost curves
  4. demand curves
Question 14 (1 point)
Equilibrium in oligopoly markets is characterized by:
  1. P > AC and MR = MC
  2. P = MR and AC = MC
  3. P < MR and AC < MC
  4. P = AC and MR = MC
Question 15 (1 point)
The vigor of competition always decreases with a fall in:
  1. product differentiation
  2. barriers to entry
  3. the level of available information
  4. the number of competitors
Question 16 (1 point)
The four-firm concentration ratio will rise following:
  1. a rise in imports
  2. a fall in imports
  3. a merger between the two largest firms in the industry
  4. small firm entry
Question 17 (1 point)
A kinked demand curve results from:
  1. different competitor reactions
  2. competitor price reactions
  3. an absence of competitor price reactions
  4. supply imbalance
Question 18 (1 point)
In monopolistically competitive markets, the firm demand curve is:
  1. upward sloping
  2. downward sloping
  3. horizontal
  4. vertical
Question 19 (1 point)
In oligopoly markets, the market demand curve is:
  1. upward sloping
  2. downward sloping
  3. horizontal
  4. vertical
Question 20 (1 point)
A theory used to explain rigid or "sticky" in oligopoly markets is proposed in the:
  1. Cournot model
  2. Stackelberg model
  3. Bertrand model
  4. Sweezy model
Copyright 2008, by the Contributing Authors. Cite/attribute Resource. admin. (2009, January 27). Quiz 8. Retrieved November 23, 2009, from Free Online Course Materials — USU OpenCourseWare Web site: http://ocw.usu.edu/economics/managerial-economics/quiz8.htm. This work is licensed under a Creative Commons License. Creative Commons License