1) A key feature of oligopoly is _____ A) Strategic interdependence B) Differnti
ID: 1216357 • Letter: 1
Question
1) A key feature of oligopoly is _____
A) Strategic interdependence
B) Differntiated out
C) Standardized output
D) No significant barries to entry
E) None of these
2) Which of the following is not true for monopolistically competitive firms in the long run?
A) Economic profit equals zero
B) Price equals average total cost
C) Average total cost is minimized
D) Marginal revenue equals marginal cost
E) Price exceeds marginal revenue
3) Monopolistic competition has three characterisitcs: A differentiated product, no significant barrier to entry, a few buyers and sellers. (TRUE/FALSE)
4) The resturant industry in large city most closely resembles the market structure of which of the following?
A) Perfect competition
B) Monopolistic competition
C) Monopoly
D) Oligopoly with cooperative behavior
E) Oligopoly without cooperative behavior
5) Cheating on a collusive agreement is more likely when firms can easily observe other firms' prices (TRUE/FALSE)
6) Under monopolistic competition, firms operate with _____.
A) Average total cost is greather than its minimum possible value.
B) Marginal revenue equals marginal cost.
C) Marginal revenue is greater than marginal cost
D) Price is greater than marginal revenue
E) Marginal cost is greater than average cost
7) Both monopoly and monopolistic competition share which of the following features?
A) Downward sloping demand curve
B) No significant barries to entry or exit
C) Strategic interdependence
D) None of these
8) Which of the following is always true for monopolistically competitive firms in the short run?
A) Marginal revenue equals marginal cost
B) Economic profit equals zero
C) Price equals average total cost
D) Average total cost is minimized
E) Marginal revenue equals price
Explanation / Answer
Q.1)ans: (A) Strategic interdependence
The foremost characteristic of oligopoly is interdependence of the various firms in the decision making.
This fact is recognized by all the firms in an oligopolistic industry. If a small number of sizeable firms constitute an industry and one of these firms starts advertising campaign on a big scale or designs a new model of the product which immediately captures the market, it will surely provoke countermoves on the part of rival firms in the industry.
Thus different firms are closely inter dependent on each other.
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