Question 1

In neither monopolistic competition nor oligopoly market structures:

Accepted Answer

A)  is there easy entry and exit.
B)  do consumers perceive differences among the products of various competitors.
C)  is there a single seller.
D)  are economic profits earned in the long run.E) B) and C)
F) A) and D)

Question 2

The Herfindahl Hirschmann Index (HHI)  is a popular measure of competitor size inequality that reflects size differences among large and small firms.Which of the following is true?

Accepted Answer

A)  HHI approaches zero for industries characterized by a large number of very small competitors.
B)  Calculated in percentage terms, the HHI is the sum of the market shares for all n industry competitors.
C)  A monopoly industry with a single dominant firm is described by a HHI = 100.
D)  A vigorously competitive industry where each of the leading four firms enjoy market shares of 25% is described by a HHI = 100.E) A) and B)
F) None of the above

Question 3

In an oligopoly market, firms always:

Accepted Answer

A)  offer products that are not perfect substitutes.
B)  make decisions in light of expected reactions from other firms.
C)  set price equal to marginal cost.
D)  are price takers.E) A) and D)
F) A) and C)

Question 4

Monopolistically competitive firms earn a normal profit whenever price is set equal to:

Accepted Answer

A)  minimum average cost.
B)  average cost.
C)  average variable cost.
D)  average revenue.E) None of the above
F) A) and B) B

Question 5

Oligopoly is always characterized by:

Accepted Answer

A)  homogeneous products.
B)  barriers to entry or exit.
C)  perfect dissemination of information.
D)  differentiated products.E) B) and C)
F) All of the above

Question 6

When prices in oligopoly markets exceed those in a perfectly competitive equilibrium, this difference is the cost of:

Accepted Answer

A)  information.
B)  inefficiency.
C)  market power.
D)  product differentiation.E) B) and D)
F) B) and C) C

Question 7

If LRAC decline continuously, it is impossible to have:

Accepted Answer

A)  perfect competition.
B)  monopolistic competition.
C)  oligopoly.
D)  monopoly.E) C) and D)
F) A) and B)

Question 8

In oligopoly equilibrium:

Accepted Answer

A)  MC = AC.
B)  MC 
C)  MC > AC.
D)  MC = MR.E) None of the above
F) A) and D)

Question 9

For a firm in monopolistically competitive market equilibrium:

Accepted Answer

A)  MC > AC.
B)  MC = MR.
C)  MR > AR.
D)  AR > AC.E) All of the above
F) A) and D) B

Question 10

Firms never face a downward sloping demand curve in markets characterized by:

Accepted Answer

A)  perfect competition.
B)  monopolistic competition.
C)  oligopoly.
D)  monopoly.E) A) and B)
F) None of the above

Exam 13: Monopolistic Competition and Oligopoly

In neither monopolistic competition nor oligopoly market structures:

Correct Answer
verified

The Herfindahl Hirschmann Index (HHI) is a popular measure of competitor size inequality that reflects size differences among large and small firms.Which of the following is true?

Correct Answer
verified

In an oligopoly market, firms always:

Correct Answer
verified

Monopolistically competitive firms earn a normal profit whenever price is set equal to:

Correct Answer
verified
B

Oligopoly is always characterized by:

Correct Answer
verified

When prices in oligopoly markets exceed those in a perfectly competitive equilibrium, this difference is the cost of:

Correct Answer
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C

If LRAC decline continuously, it is impossible to have:

Correct Answer
verified

In oligopoly equilibrium:

Correct Answer
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For a firm in monopolistically competitive market equilibrium:

Correct Answer
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B

Firms never face a downward sloping demand curve in markets characterized by:

Correct Answer
verified

Exam 13: Monopolistic Competition and Oligopoly

In neither monopolistic competition nor oligopoly market structures:

Correct AnswerverifiedShow Answer

The Herfindahl Hirschmann Index (HHI) is a popular measure of competitor size inequality that reflects size differences among large and small firms.Which of the following is true?

Correct AnswerverifiedShow Answer

In an oligopoly market, firms always:

Correct AnswerverifiedShow Answer

Monopolistically competitive firms earn a normal profit whenever price is set equal to:

Correct AnswerverifiedB

Oligopoly is always characterized by:

Correct AnswerverifiedShow Answer

When prices in oligopoly markets exceed those in a perfectly competitive equilibrium, this difference is the cost of:

Correct AnswerverifiedC

If LRAC decline continuously, it is impossible to have:

Correct AnswerverifiedShow Answer

In oligopoly equilibrium:

Correct AnswerverifiedShow Answer

For a firm in monopolistically competitive market equilibrium:

Correct AnswerverifiedB

Firms never face a downward sloping demand curve in markets characterized by:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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C

Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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