Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
156. The above diagram portrays:
157. Refer to the above diagram. Equilibrium output is:
158. Refer to the above diagram. Equilibrium price is:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
159. Refer to the above diagram. This firm’s demand and marginal revenue curves are based
on the assumption that:
160. Refer to the above diagram. In equilibrium the firm:
161. OPEC provides an example of:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
162. Oligopolistic firms engage in collusion to:
163. The likelihood of a cartel being successful is greater when:
164. Cartels are difficult to maintain in the long run because:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
165. Three major means of collusion by oligopolists are:
166. If the firms in an oligopolistic industry can establish an effective cartel, the resulting
output and price will approximate those of:
167. In the United States cartels are:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
168. One would expect that collusion among oligopolistic producers would be easiest to
achieve in which of the following cases?
169. Suppose the only three existing manufacturers of video game players signed a written
contract by which each agreed to charge the same price for products and to distribute their
products only in the geographical area assigned to them in the contract. This best describes:
170. Suppose firms in a collusive oligopoly decide to establish their prices at a level that
discourages new rivals from entering the industry. This is called:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
171. If the several oligopolistic firms that comprise an industry behave collusively, the
resulting price and output will most likely resemble those of:
172. Other things equal, cartels and similar collusive arrangements are easier to establish and
maintain:
173. A breakdown in price leadership leading to successive rounds of price cuts is known as:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
174. Which of the following nations is not a member of the OPEC oil cartel?
175. Which of the following companies was convicted in the 1990s as part of a conspiracy to
fix prices?
176. Secret conspiracies to fix prices are examples of:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
177. In 2008, advertising expenditures in the United States were:
178. Advertising can enhance economic efficiency when it:
179. Advertising can enhance economic efficiency when it:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
180. Advertising can impede economic efficiency when it:
181. Advertising can impede economic efficiency when it:
182. We would expect a cartel to achieve:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
183. Suppose that a particular industry has a four-firm concentration ratio of 85 and a
Herfindahl Index of 3,000. Most likely, this industry would achieve:
184. Suppose that an industry is characterized by a few firms and price leadership. We would
expect that:
185. The conclusion that oligopoly is inefficient relative to the competitive ideal must be
qualified because:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
186. (Consider This) The story about three sellers of Native American arts and crafts best
illustrates the idea of:
187. (Consider This) The Native American arts and crafts story illustrates the twin ideas of:
188. (Consider This) The prisoner’s dilemma is generally demonstrated through:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
189. (Consider This) The prisoner’s dilemma reveals that:
190. (Last Word) The U.S. beer industry:
191. (Last Word) Increased concentration in the beer industry has been caused by:
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
192. (Last Word) The two largest U.S. brewers share about:
193. (Last Word) The two leading producers of beer in the United States have market shares
of 48 percent and 18 percent, respectively. On the basis of that information, we can conclude
that:
194. In the long run monopolistically competitive firms make normal profits because they are
forced to operate at the minimum point on their average total cost curve.
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
195. The monopolistically competitive seller maximizes profits by equating price and
marginal cost.
196. Monopolistically competitive firms are inefficient because they produce at a point on the
rising segment of their average cost curves.
197. The demand curve of a monopolistically competitive producer is less elastic than that of
a purely competitive producer.
198. The larger the number of firms and the less the degree of product differentiation, the
greater will be the elasticity of a monopolistically competitive seller’s demand curve.
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
199. The economic profits earned by monopolistically competitive sellers are zero in the long
run.
200. The excess capacity problem associated with monopolistic competition implies that
fewer firms could produce the same industry output at a lower total cost.
201. The demand curve of a monopolistically competitive firm is more elastic than that of a
pure monopolist.
202. Monopolistically competitive sellers realize economic profits in the long run because
entry barriers are significant.
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
203. Monopolistically competitive sellers produce efficiently because they obtain only normal
profits in the long run.
204. The oligopolist’s kinked-demand curve is highly elastic below and highly inelastic above
the going product price.
205. Mutual interdependence means that oligopolistic producers rely primarily on price
competition in determining their shares of the total market for their product.
206. If an oligopolist’s several rivals exactly match any price changes it initiates, the demand
curve will be less elastic than if its price changes are ignored by its rivals.
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix)
207. If three or four homogeneous oligopolists collude, the resulting price and production
outcomes will be similar to those of pure monopoly.
208. All other things equal, the larger the number of firms in an oligopolistic industry, the
more difficult it is for those firms to collude.
209. Generally speaking, oligopolistic industries producing raw materials and semifinished
goods usually offer differentiated products, while oligopolists producing consumer goods
usually offer standardized products.
210. Two industries that have the same 4-firm concentration ratio can have significantly
different Herfindahl indexes.