1. (0.1 pt) _________________________ is a tool used to analyze oligopolistic ma

ID: 1123182 • Letter: 1

Question

1. (0.1 pt) _________________________ is a tool used to analyze oligopolistic markets.

2. (0.2 pt) New firms will enter a monopolistically competitive market if

(marginal revenue, price) is greater than (average total cost, marginal cost).

(Circle the correct answer for each.)

3. (0.2 pt) Consider perfect competition and monopolistic competition when answering

the following questions:

State one way in which they are different.

State one way in which they are the same.

4. (0.2 pt) Consider monopoly and monopolistic competition when answering the

following questions:

State one way in which they are different.

State one way in which they are the same.

5. (1.3 pt) There is an oligopoly market for olive oil in New York City which is controlled by

two families, the Sopranos and the Contraltos. The marginal cost of producing

olive oil is constant and equal to $40 per gallon. There is no fixed cost. The

table below gives the market demand schedule for olive oil.

(Make sure to show all your work.)

1. Concentration ratio is the best tool to analyze extent of oligopoly.

2. Price, average total cost. Firms enter in case of profit which occurs when p> atc.

3. Difference = product is similar under perfect competition but is is differentiated in monopolistic competition

Similarity = no barriers to enter and exit.

4. Difference = product is unique in monopoly while the product is differentiated in monopolistic competition.

Similarity = downward sloping demand curve

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