15.1 What Is Oligopoly
1) The market structure in which natural : 1418026
15.1 What Is Oligopoly
1) The market structure in which natural or legal barriers prevent the entry of new firms and a small number of firms compete is
B) monopolistic competition.
C) perfect competition.
2) Suppose that industry A consists of four firms who collectively control 96 percent of total sales in the market. We can conclude that industry A is
A) perfectly competitive.
B) a duopoly.
C) monopolistically competitive.
D) an oligopoly.
E) a monopoly.
3) Which one the following industries is the best example of an oligopoly?
A) the market for wheat
B) the fast-food industry
C) the automobile industry
D) the clothing industry
E) the restaurant industry
4) Which one of the following industries is the best example of an oligopoly?
A) the battery industry
B) the sporting goods industry
C) the footwear industry
D) the cosmetics industry
E) the power industry
5) Which one of the following characteristics applies to oligopolistic markets?
A) There is a large number of firms.
B) The absence of barriers to entry of firms.
C) Firms are large relative to the size of the market.
D) All firms are price takers.
E) Firms produce only differentiated products.
6) Which one of the following characteristics applies to oligopolistic markets?
A) There is free entry of rival firms.
B) Firms are so large relative to the market that they do not have to consider the behaviour of rival firms.
C) Firms are mutually independent because there are many firms in the industry.
D) Firms have to consider the behaviour of their rivals since their rivals are also large relative to the size of the market as a whole.
E) Economic profit of each firm equals zero.
7) Why might only a few firms dominate an oligopolistic industry?
A) A natural or legal barrier to entry exists.
B) Perfectly elastic demand makes small-scale operation economically inefficient.
C) Decreasing returns to scale may make small-scale firms more advantageous.
D) Inelastic market demand leads to the domination of the industry by a few firms.
E) It is due to the outcome of the prisoners' dilemma.
8) Firm X is competing in an oligopolistic industry. When firm X increases its price
A) then rival firm Y will always increase its price.
B) then rival firm Y will increase its market share if firm Y also increases its price.
C) then the behaviour of rival firm Y will have no impact on the market share of firm X.
D) the market as a whole will become less profitable.
E) the rival firm Y will increase its market share if firm Y keeps a constant price.
9) Which is not a characteristic of oligopoly?
A) Each firm faces a downward-sloping demand curve.
B) Firms are profit-maximizers.
C) The sales of one firm will not have a significant effect on other firms.
D) There is more than one firm in the industry.
E) Firms set prices.
10) If the efficient scale of production only allows three firms to supply a market, the market is a
A) three-firm monopoly.
B) cost-based oligopoly.
C) natural oligopolgy.
D) monopolistic competition.
E) competitive monopoly.