Question 1

All of the following statements are consistent with the kinked demand curve theory except

Accepted Answer

A)  the theory depicts cutthroat competition.
B)  according to the theory, firms are reluctant to raise or lower price.
C)  according to the theory, if a firm raised its prices its competitors also would raise their prices.
D)  the theory is associated with "sticky prices."

Question 2

The Dango describes

Accepted Answer

A)  covert collusion in the Japanese construction industry.
B)  a Korean business arrangement whereby only firms with insider connections may enter an industry.
C)  a bribe paid by colluding business firms to get government contracts in Asia.
D)  the price set by the price leader in Eastern European oligopolies.

Question 3

Of all the cars made in the United States, General Motors makes only ______ percent of them.

Accepted Answer

The answer of Of all the cars made in the...

Question 4

Use the following Table to answer the question :

-Draw a graph of the demand, marginal revenue, average total cost, and marginal cost curves.

Accepted Answer

The answer of Use the following Table to answer the...

Question 5

Which would best describe an oligopolized industry?

Accepted Answer

A)  An industry dominated by two or three large firms
B)  An industry dominated by one large firm
C)  An industry with a very low concentration ratio
D)  An industry with many firms

Question 6

Oligopolistic firms

Accepted Answer

A)  are few in number.
B)  are interdependent.
C)  charge a higher price and produce a smaller output than perfect competitors.
D)  all of the choices are true of oligopolistic firms.

Question 7

Which statement is false?

Accepted Answer

A)  Cigarettes, motor vehicles, and pipelines are industries with high concentration ratios.
B)  Oligopolized industries have higher concentration ratios than monopolistic competitors.
C)  The Electric Machinery Conspiracy case involved covert collusion.
D)  None of these statements are false.

Question 8

Use the following Figure to answer the question :

-The price charged by this profit-maximizing firm is $____ and its output is ___ (assume marginal cost is MC1) .

Accepted Answer

A)  $45; 9
B)  $45; 11
C)  $65; 9
D)  $65; 11

Question 9

Which is the most accurate statement?

Accepted Answer

A)  A concentration ratio of 100 would mean that just one firm has 100% of that industry's sales.
B)  No industry in the U.S.has a concentration ratio of 100.
C)  Food services like McDonald's and Wendy's have a concentration ratio of less than 50.
D)  The lower the concentration ratio, the higher the degree of oligopolization.

Question 10

Use the following Table to answer the question :

-Which statement is true?

Accepted Answer

A)  Industry Y has a Herfindahl-Hirschman Index of 95.
B)  Industry Y has an H-H-I of 100.
C)  Industry Y has an H-H-I of 1,000.
D)  Industry Y has an H-H-I of 2,738.

Question 11

Prices are rigid at the kink of an oligopolist's demand curve because

Accepted Answer

A)  changes in fixed costs have no impact on the profit-maximizing price.
B)  changes in marginal cost in the discontinuous section of the marginal revenue curve do not alter the profit-maximizing price and output.
C)  changes in supply are infrequent.
D)  changes in average cost in the gapped section of the marginal revenue curve alter the profit-maximizing price and output.

Question 12

Even with the big three textbook publishers (McGraw-Hill, Pearson, and Sage-Reuters)  having a large market share, the textbook industry is still considered a ____________ model because of the high level of competition that exists.

Accepted Answer

A)  cartel
B)  cut throat competitor
C)  open collusion
D)  price leadership

Question 13

A Herfindahl-Hirschman Index of 10,000 would mean there is (are)  how many firm(s)  in the industry?

Accepted Answer

A)  1
B)  10
C)  1,000
D)  10,000

Question 14

An oligopolist must be very sensitive to its rivals because

Accepted Answer

A)  there are so many that their actions are unpredictable.
B)  the government doesn't regulate oligopolists when it comes to colluding on prices and quantities.
C)  there are so few that their behavior may well have consequences for the firm.
D)  oligopolists try not to use non-price competition since it seems to be unfair to the consumer.
E)  they have little else to do.

Question 15

Use the following Figure to answer the question :

-How much does quantity change if MC1 shifts to MC2?

Accepted Answer

A)  Slightly less than one
B)  About one
C)  Slightly more than one
D)  Two
E)  Not at all

Question 16

When the cutthroat oligopolist raises their prices, their competitors will ___________ theirs.

Accepted Answer

keep their...

Question 17

Statement I. Most cars sold in the United States were made in Japan or assembled in the United States by Japanese-owned companies. Statement II. Imports of fuel-efficient cars made in Japan reduced the concentration ratio in the United States that was dominated by G.M., Ford, and Chrysler.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.

Question 18

Use the following Table to answer the question :

-The highest Herfindahl-Hirschman index

Accepted Answer

A)  is in Industry X.
B)  is in Industry Y.
C)  is in Industry Z.
D)  cannot be determined.

Question 19

Use the following Figure to answer the question :

-Calculate the firm's total profit.

Accepted Answer

Total profit = (pric...

Question 20

Sticky prices in oligopoly markets are

Accepted Answer

A)  represented by the kinked demand curve model.
B)  typical of cartels.
C)  most common for highly differentiated products.
D)  a result of price discrimination.

Exam 12: Oligopoly

A Herfindahl-Hirschman Index of 10,000 would mean there is (are) how many firm(s) in the industry?

Correct AnswerverifiedShow Answer

Prices are rigid at the kink of an oligopolist's demand curve because

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Statement I. Most cars sold in the United States were made in Japan or assembled in the United States by Japanese-owned companies. Statement II. Imports of fuel-efficient cars made in Japan reduced the concentration ratio in the United States that was dominated by G.M., Ford, and Chrysler.

Correct AnswerverifiedShow Answer

Oligopolistic firms

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Use the following Table to answer the question : -The highest Herfindahl-Hirschman index

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An oligopolist must be very sensitive to its rivals because

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Use the following Table to answer the question : -Draw a graph of the demand, marginal revenue, average total cost, and marginal cost curves.

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Sticky prices in oligopoly markets are

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Use the following Figure to answer the question : -The price charged by this profit-maximizing firm is $____ and its output is ___ (assume marginal cost is MC1) .

Correct AnswerverifiedShow Answer

Of all the cars made in the United States, General Motors makes only ______ percent of them.

Correct AnswerverifiedShow Answer

The Dango describes

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When the cutthroat oligopolist raises their prices, their competitors will ___________ theirs.

Correct Answerverifiedkeep their...View AnswerShow Answer

Which statement is false?

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Use the following Figure to answer the question : -How much does quantity change if MC1 shifts to MC2?

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Use the following Table to answer the question : -Which statement is true?

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Which is the most accurate statement?

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Use the following Figure to answer the question : -Calculate the firm's total profit.

Correct AnswerverifiedTotal profit = (pric...View AnswerShow Answer

Even with the big three textbook publishers (McGraw-Hill, Pearson, and Sage-Reuters) having a large market share, the textbook industry is still considered a ____________ model because of the high level of competition that exists.

Correct AnswerverifiedShow Answer

Which would best describe an oligopolized industry?

Correct AnswerverifiedShow Answer

All of the following statements are consistent with the kinked demand curve theory except

Correct AnswerverifiedShow Answer

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Use the following Figure to answer the question : -The price charged by this profit-maximizing firm is $__ and its output is _ (assume marginal cost is MC1) .

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keep their...
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Total profit = (pric...
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