Multiple Choice Questions

There is a gap in the oligopolist's marginal-revenue curve because
  • match price cuts, but ignore price increases.
  • the slope of the demand curve changes abruptly.
  • price competition can lower revenue for all firms.
  • firms expect any change in price will lower revenue and profits.
The most common reason that oligopolies exist is
  • a lack of explanation for how the initial price is set.
  • economies of scale.
  • Collusive pricing is economically desirable from the oligopoly's viewpoint because it results in monopoly profits.
  • the slope of the demand curve changes abruptly.
Shortcomings of the kinked-demand model include
  • price competition can lower revenue for all firms.
  • has few firms, whereas monopolistic competition has more firms.
  • the slope of the demand curve changes abruptly.
  • a lack of explanation for how the initial price is set.
The kinked-demand curve for oligopolists assumes that rivals will
  • price competition can lower revenue for all firms.
  • the slope of the demand curve changes abruptly.
  • match price cuts, but ignore price increases.
  • firms expect any change in price will lower revenue and profits.
Oligopoly differs from monopolistic competition in that oligopoly
  • firms expect any change in price will lower revenue and profits.
  • price competition can lower revenue for all firms.
  • the slope of the demand curve changes abruptly.
  • has few firms, whereas monopolistic competition has more firms.
Which of the following is a shortcoming of concentration ratios as measures of monopoly power?
  • They do not account for interindustry competition.
  • the slope of the demand curve changes abruptly.
  • Automobiles, personal computers, and gasoline
  • price competition can lower revenue for all firms.
Assess the economic desirability of collusive pricing.
  • economies of scale.
  • Collusive pricing is economically desirable from the oligopoly's viewpoint because it results in monopoly profits.
  • price competition can lower revenue for all firms.
  • a lack of explanation for how the initial price is set.
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Multiple Choice Questions
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