Microeconomics Ch. 14

Which of the following is not part of an oligopolist’s business strategy?

A) meeting worker health and safety standards required of all firms
B) deciding the level of total output of a new product
C) determining the amount of advertising a new product needs
D) setting the product’s price after considering what rivals will do

A) meeting worker health and safety standards required of all firms

An oligopolistic industry is characterized by all of the following except

A) existence of entry barriers.
B) the possibility of reaping long run economic profits.
C) firms pursuing aggressive business strategies, independent of rivals’ strategies.
D) production of standardized products.

C) firms pursuing aggressive business strategies, independent of rivals’ strategies.

An oligopolist differs from a perfect competitor in that

A) there is cutthroat competition in perfect competition but little competition in oligopoly because firms have significant market power.
B) firms in an oligopoly do not produce homogeneous products while firms in perfect competition do.
C) the market demand curve for a perfectly competitive industry is perfectly elastic but it is downward-sloping in an oligopolistic industry.
D) there are no entry barriers in perfect competition but there are entry barriers in oligopoly.

D) there are no entry barriers in perfect competition but there are entry barriers in oligopoly.

Which of the following is the best example of an oligopolistic industry?

A) the beef market
B) the pharmaceutical industry
C) public education
D) the beauty products industry

B) the pharmaceutical industry

Producing a homogeneous product occurs in which of the following industries?

A) oligopoly, monopolistic competition and perfect competition
B) perfect competition only
C) oligopoly and perfect competition
D) monopolistic competition and perfect competition

C) oligopoly and perfect competition

Producing a differentiated product occurs in which of the following industries?

A) oligopoly, monopolistic competition and perfect competition
B) monopolistic competition only
C) oligopoly only
D) monopolistic competition and oligopoly

D) monopolistic competition and oligopoly

A four-firm concentration ratio measures

A) the fraction of an industry’s sales accounted for by the four largest firms.
B) the production of any four firms in an industry.
C) how the four largest firms became so concentrated.
D) the fraction of employment of the four largest firms in an industry.

A) the fraction of an industry’s sales accounted for by the four largest firms.