What is one difference between a firm in a perfectly competitive industry and a firm in a monopolistically competitive industry?
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A monopolistically competitive firm does not have the exact same product as other firms
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What is one difference between a firm in a perfectly competitive industry and a firm in a monopolistically competitive industry?
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A monopolistically competitive firm faces competition from firms producing close substitutes
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Oligopolies are considered to be:
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neither allocatively nor productively efficient.
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Which of the following is an example of an oligopolistic market with a differentiated product?
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The market for cell phone services
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Which of the following is an example of an oligopolistic market with a standardized product?
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The market for aluminum
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In an oligopolistic market there are
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few sellers.
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The characteristic most closely associated with oligopoly is
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a few large producers.
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The consumer wifi-service providers' market is best described as a
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oligopoly.
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A unique feature of an oligopolistic industry is
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mutual interdependence.
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Which of the following is a characteristic of monopolistic competition?
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relatively easy entry
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A monopolistically competitive industry is like a purely competitive industry in that
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neither industry has significant barriers to entry.
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Which assumption is part of the model of monopolistic competition?
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There is no collusion or mutual interdependence among firms.
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Monopolistic competition is characterized by firms
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producing differentiated products.
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When firms in an industry reach an agreement to fix prices, divide up market share, or otherwise restrict competition, they are practicing the strategy of
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collusion.
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Collusive control over price may permit oligopolists to
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reduce uncertainty, increase profits, and possibly limit entry of new firms.
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In an oligopoly, producers' agreements to restrict output tend to be unstable because each firm has an incentive to
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produce more than its output quota.
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Without collusion, what will each firm decide to sell their app for?
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Both firms will sell the app for $1.99
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