In an oligopoly:A) there are many sellers.B) there are no barriers to entry.C) firms recognize their interdependence.D) total surplus is maximized.10.
Monopolistic competition is an industry characterized by:A) a product with no close substitutes.B) a horizontal demand curve.C) a large number of firms.D) barriers to entry and exit.11.
The airline industry often engages in Bertrand behavior. This means that firms often ________ prices until profits ________.A) raise; are maximizedB) lower; are maximizedC) lower; approach zeroD) raise; approach zero12.
Which of the following is
a barrier to entry?A) control of an input essential for productionB) government-created barriers such as patentsC) a ban on certain kinds of advertisingD) the existence of significant economies of scale13.
If the only two firms in an industry openly agree to fix the price or output level, then this is an example of:A) cartel behavior.B) price leadership.C) perfect competition.D) tacit collusion.14.
If a monopolist is producing a quantity that generates
then profit:A) is maximized.B) is maximized only if
C) can be increased by increasing production.D) can be increased by decreasing production.15.
A demand curve that is downward-sloping will ensure that:A)
Non-price competition is more prevalent in an oligopoly in which there is (are):A) a Nash equilibrium.B) complex products.C) tacit collusion.D) no product differentiations.17.
In monopolistic competition:A) firms advertise to increase demand for their product.B) entry of new firms shifts the demand curve for existing firms to the right.C) when some firms exit, the demand curve for the firms that remain in the industry shifts to the left.D) firms earn large economic profits in the long run.