Chapter 10 example #15663

1. _____________ occurs when circumstances have allowed several large firms to have all or most of the sales in an industry. A. Collusion B. A monopoly C. An oligopoly D. A cartel

2. _________ arises when firms act together to reduce output and keep prices high. A. Collusion B. A cartel C. A monopoly D. An oligopoly

3. A _________ refers to a group of firms colluding with one another to produce at the monopoly output and sell at the monopoly price. A. prisoner's dilemma B. cartel C. game theory D. duopoly

4. The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is A. oligopoly collusion. B. prisoner's dilemma. C. game theory. D. collusion theory

6. Shopping malls typically lease retail space to a large number of clothing stores. When this group of retailers competes to sell similar but not identical products, they engage in what economists call ________________________. A. a cartel B. collusion C. monopolistic competition D. perfect competition

5. Perfect competition and monopoly stand at _____________ of the spectrum of competition. A. opposite ends B. the high end C. the low end D. the mid-way point

7. Oligopoly firms acting individually may seek to gain profits ___________________________ . A. by expanding levels of output and cutting prices B. by selling products that are distinctive in some way C. by having a mini-monopoly on a particular brand name D. by having a mini-monopoly or through tough competition

8. In a monopolistic competitive industry, firms can try to differentiate their products by A. creating optimal perceptions of the product. B. choosing optimal locations from which the product is sold. C. enhancing the intangible aspects of the product. D. enhancing product's physical aspects and all of the above.

9. Monopolistic competitors in the food industry will often include a recyclable symbol on packaging used for their product as a means to A. be socially responsible. B. be environmentally responsible. C. differentiate their product. D. be perceived more favorably.

10. What role can advertising play with respect to differentiated products? A. allows a firm to sell any quantity it wishes B. shapes consumers intangible preferences C. shapes perceived demand for a price taker D. allows a firm to raise the prevailing market price

12. The first step to be undertaken by a profit-maximizing monopolistic competitor wanting to decide what price to charge is to A. determine total revenue, total cost, and profit B. select the profit maximizing quantity to produce C. determine what price to charge for the product D. determine average costs, total revenue, and profit

11. If a monopoly or a monopolistic competitor raises their prices, then A. decline in quantity demanded will be larger for the monopoly. B. decline in quantity demanded will be larger for the monopolistic competitor. C. the quantity demanded for the monopoly product falls to zero. D. the quantity demanded for the monopolistic competitor will fall to zero.

13. Monopolistic competitors can make a _____________ in the short-run, but in the long run, ______________ will drive these firms toward _______________________ . A. profit or loss entry and exit; a zero-profit outcome B. loss; exit; losses on their earnings C. profit or loss; exit; economic profits D. profit; entry; a price that lies at the very bottom of the AC curve

15. When P > MC in a monopolistically competitive market, that industry will most likely produce ______________________ than would be found in a perfectly competitive industry. A. a higher quantity of a good and charge a lower price B. the price that people are willing to pay is lower C. a lower quantity of a good and charge a higher price D. the price people are willing to pay is not more

14. In a monopolistically competitive market, the rule for maximizing profit is to set MR = MC, which means A. price is higher than marginal revenue. B. price is equal to marginal revenue. C. price is equal to marginal cost. D. price is lower than marginal revenue.

16. When entry occurs in a monopolistically competitive industry, A. the perceived demand and marginal revenue curves for each firm will shift to the right. B. the perceived demand and marginal revenue curves for each firm will shift to the left. C. the perceived demand curve for each firm will shift to the right. D. the marginal revenue curves for each firm will shift to the right.

17. In the framework of monopolistic competition, the way advertising works can be perceived as A. causing a firm's perceived demand curve to become more elastic. B. causing a firm's perceived demand curve to become more inelastic. C. causing demand for the firm's product to increase. D. causing both b and c to occur.

18. The single most common form of competition in the U.S. is A. perfect competition among firms with differentiated products. B. monopolistic competition among firms with differentiated products. C. oligopolistic competition in a certain market with similar products. D. perfect competition because it displays product and allocative efficiencies

19. The prisoner's dilemma shows A. the gains from cooperation may be higher than the rewards from pursuing self-interest. B. why it is hard to maintain a cartel. C. both A and B. D. neither A or B.

20. Which of the following is true? A. Neither monopolistic competition nor oligopoly is efficient. B. Both monopolistic competition and oligopoly are efficient. C. Go away. D. Leave me alone.