1. A two firm oligopoly is known as a ___a. Duopolyb. Cartelc. Monopolyd. Contestable market2. The demand curve facing a dominant firm in the price leadership model is derived by subtracting thea. Amount supplied by the smaller firms from market demandb. Amount supplied by the smaller firms from market supplyc. Amount demanded by customers from the smaller firms from market supplyd. Dominant firm’s marginal cost curve from the industry’s supply curve3. ___ occurs when price- and quantity-fixing agreements among producers are implicit.a. Tacit collusionb. A Cournot modelc. A price-leadership modeld. A monopoly4. A(n) ___ industry is characterized by strategic behavior.a. Perfectly competitiveb. Monopolisticc. Monopolistically competitived. Oligopolistic5. Resources are allocated efficiently whena. The market produces what people wantb. Economic profits are zeroc. Output is distributed in an equitable fashiond. Output is produced in a sustainable fashion6. According to the Five Forces Model, ___ are the five competitive forces that determine the level of competition and profitability in an industry.a. Rivals, buyers, suppliers, substitutes, and potential entrantsb. Rivals, consumers, labor, weather, and governmentc. Buyers, suppliers, government, foreign competition, and weatherd. None of the above7. Product differentiation that makes the product better for some consumers and worse for others isa. Always welfare decreasingb. Vertical differentiationc. Horizontal differentiationd. Never undertaken by firms8. Monopolies, oligopolies, and monopolistic competitive industries alla. Earn positive profits in the long runb. Have market powerc. Are completely unconstrained in their pricingd. Raise price and quantity over what would occur in perfect competition in order to maximize their profits9. To maximize profit, a monopolistically competitive firm will produce wherea. Marginal revenue equals priceb. Price equals marginal costc. Price equals average total costd. Marginal revenue equals marginal cost10. In a monopolistically competitive industrya. Firms are large relative to the total marketb. Firms are small relative to the total marketc. Firms can be either large or small relative to the total marketd. There is only one firm
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