1- A way in which monopolistic competition differs from oligopoly
is it
A.
there are no barriers to entry into
oligopolies.
B
in oligopolistic markets, there are only
some sellers.
vs.
all firms in an oligopoly
end up making zero economic benefits.
D.
Strategic interactions between firms are rare in oligopolies
A.
there are no barriers to entry into
oligopolies.
B
in oligopolistic markets, there are only
some sellers.
vs.
all firms in an oligopoly
end up making zero economic benefits.
D.
Strategic interactions between firms are rare in oligopolies
A.
there are no barriers to entry into
oligopolies.
A. there are no barriers to entry into
oligopolies.
B
in oligopolistic markets, there are only
some sellers.
B. in oligopolistic markets, there are only
some sellers.
vs.
all firms in an oligopoly
end up making zero economic benefits.
C. all firms in an oligopoly
end up making zero economic benefits.
D.
Strategic interactions between firms are rare in oligopolies
D.
Strategic interactions between firms are rare in oligopolies
of them-
As the number of firms in an oligopoly increases,
A.
the price approximates marginal cost, and
the amount approaches the socially effective level.
B
approximate price and quantity
monopoly levels.
vs.
the price effect exceeds production
It is done.
D.
the profits of individual companies increase.
3-
The equilibrium price in a market characterized by oligopoly
He is
A.
higher than in monopoly markets and
higher than that of perfectly competitive markets.
B
higher than in monopoly markets and
lower than in perfectly competitive markets.
vs.
lower than that of monopoly markets and
higher than that of perfectly competitive markets.
D.
lower than that of monopoly markets and
lower than in perfectly competitive markets.
4-
From the point of view of society, cooperation between oligopolies is
A.
desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
B
desirable, as this leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
vs.
undesirable, because it leads to
very low production levels and very high prices.
D.
undesirable, because it leads to
very high production levels and very high prices.
5-
Suppose there are 5 companies in the industry with a market share like
Follow:
Company 1: 30%
Company 2: 25%
Company 3: 18%
Company 4: 17%
Company 5: 10%
What is the Herfindahl-Hirshman index for this industry?
A.
1700
B
2238
vs.
100
D.
1200
of them-
As the number of firms in an oligopoly increases,
A.
the price approximates marginal cost, and
the amount approaches the socially effective level.
B
approximate price and quantity
monopoly levels.
vs.
the price effect exceeds production
It is done.
D.
the profits of individual companies increase.
3-
The equilibrium price in a market characterized by oligopoly
He is
A.
higher than in monopoly markets and
higher than that of perfectly competitive markets.
B
higher than in monopoly markets and
lower than in perfectly competitive markets.
vs.
lower than that of monopoly markets and
higher than that of perfectly competitive markets.
D.
lower than that of monopoly markets and
lower than in perfectly competitive markets.
4-
From the point of view of society, cooperation between oligopolies is
A.
desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
B
desirable, as this leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
vs.
undesirable, because it leads to
very low production levels and very high prices.
D.
undesirable, because it leads to
very high production levels and very high prices.
5-
Suppose there are 5 companies in the industry with a market share like
Follow:
Company 1: 30%
Company 2: 25%
Company 3: 18%
Company 4: 17%
Company 5: 10%
What is the Herfindahl-Hirshman index for this industry?
A.
1700
B
2238
vs.
100
D.
1200
of them-
As the number of firms in an oligopoly increases,
A.
the price approximates marginal cost, and
the amount approaches the socially effective level.
B
approximate price and quantity
monopoly levels.
vs.
the price effect exceeds production
It is done.
D.
the profits of individual companies increase.
of them-
As the number of firms in an oligopoly increases,
A.
the price approximates marginal cost, and
the amount approaches the socially effective level.
B
approximate price and quantity
monopoly levels.
vs.
the price effect exceeds production
It is done.
D.
the profits of individual companies increase.
As the number of firms in an oligopoly increases,
A.
the price approximates marginal cost, and
the amount approaches the socially effective level.
B
approximate price and quantity
monopoly levels.
vs.
the price effect exceeds production
It is done.
D.
the profits of individual companies increase.
A.
the price approximates marginal cost, and
the amount approaches the socially effective level.
B
approximate price and quantity
monopoly levels.
vs.
the price effect exceeds production
It is done.
D.
the profits of individual companies increase.
A.
the price approximates marginal cost, and
the amount approaches the socially effective level.
A. price approximates marginal cost and
the amount approaches the socially effective level.
B
approximate price and quantity
monopoly levels.
B. the price and quantity approximate the
levels of monopoly.
vs.
the price effect exceeds production
It is done.
C. the price effect exceeds production
It is done.
D.
the profits of individual companies increase.
D.
the profits of individual companies increase.
3-
The equilibrium price in a market characterized by oligopoly
He is
A.
higher than in monopoly markets and
higher than that of perfectly competitive markets.
B
higher than in monopoly markets and
lower than that of perfectly competitive markets.
vs.
lower than that of monopoly markets and
higher than that of perfectly competitive markets.
D.
lower than that of monopoly markets and
lower than in perfectly competitive markets.
3-
The equilibrium price in a market characterized by oligopoly
He is
A.
higher than in monopoly markets and
higher than that of perfectly competitive markets.
B
higher than in monopoly markets and
lower than in perfectly competitive markets.
vs.
lower than that of monopoly markets and
higher than that of perfectly competitive markets.
D.
lower than that of monopoly markets and
lower than in perfectly competitive markets.
The equilibrium price in a market characterized by oligopoly
He is
A.
higher than in monopoly markets and
higher than that of perfectly competitive markets.
B
higher than in monopoly markets and
lower than in perfectly competitive markets.
vs.
lower than that of monopoly markets and
higher than that of perfectly competitive markets.
D.
lower than that of monopoly markets and
lower than in perfectly competitive markets.
A.
higher than in monopoly markets and
higher than that of perfectly competitive markets.
B
higher than in monopoly markets and
lower than in perfectly competitive markets.
vs.
lower than that of monopoly markets and
higher than that of perfectly competitive markets.
D.
lower than that of monopoly markets and
lower than in perfectly competitive markets.
A.
higher than in monopoly markets and
higher than that of perfectly competitive markets.
A. higher than in monopoly markets and
higher than that of perfectly competitive markets.
B
higher than in monopoly markets and
lower than in perfectly competitive markets.
B. higher than in monopoly markets and
lower than in perfectly competitive markets.
vs.
lower than that of monopoly markets and
higher than that of perfectly competitive markets.
C. lower than monopoly markets and
higher than that of perfectly competitive markets.
D.
lower than that of monopoly markets and
lower than in perfectly competitive markets.
D. lower than monopoly markets and
lower than in perfectly competitive markets.
4-
From the point of view of society, cooperation between oligopolies is
A.
desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
B
desirable, as this leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
vs.
undesirable, because it leads to
very low production levels and very high prices.
D.
undesirable, because it leads to
very high production levels and very high prices.
4-
From the point of view of society, cooperation between oligopolies is
A.
desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
B
desirable, as this leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
vs.
undesirable, because it leads to
very low production levels and very high prices.
D.
undesirable, because it leads to
very high production levels and very high prices.
From the point of view of society, cooperation between oligopolies is
A.
desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
B
desirable, as this leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
vs.
undesirable, because it leads to
very low production levels and very high prices.
D.
undesirable, because it leads to
very high production levels and very high prices.
A.
desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
B
desirable, as this leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
vs.
undesirable, because it leads to
very low production levels and very high prices.
D.
undesirable, because it leads to
very high production levels and very high prices.
A.
desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
A. desirable, because it leads to less
conflict between companies and a greater variety of products for
consumers.
B
desirable, as this leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
B. desirable, because it leads to a
result closer to the competitive result than would be
observed in the absence of cooperation.
vs.
undesirable, because it leads to
very low production levels and very high prices.
C. undesirable, because it leads to
very low production levels and very high prices.
D.
undesirable, because it leads to
very high production levels and very high prices.
D. undesirable, because it leads to
very high production levels and very high prices.
5-
Suppose there are 5 companies in the industry with a market share like
Follow:
Company 1: 30%
Company 2: 25%
Company 3: 18%
Company 4: 17%
Company 5: 10%
What is the Herfindahl-Hirshman index for this industry?
A.
1700
B
2238
vs.
100
D.
1200
5-
Suppose there are 5 companies in the industry with a market share like
Follow:
Company 1: 30%
Company 2: 25%
Company 3: 18%
Company 4: 17%
Company 5: 10%
What is the index Herfindahl-Hirshman for this industry?
A.
1700
B
2238
vs.
100
D.
1200
Suppose there are 5 companies in the industry with a market share like
follows: Company 1: 30%
Company 2: 25%
Company 3: 18%
Company 4: 17%
Company 5: 10% What is the Herfindahl-Hirshman index for this sector?
A.
1700
B
2238
vs.
100
D.
1200
A.
1700
B
2238
vs.
100
D.
1200
A.
1700
A.1700
B
2238
B.2238
vs.
100
about 100
D.
1200
D. 1200 6- Laurel and Janet are competitors in a local market and each is
trying to decide if it’s worth advertising. if both
advertise, each will make a profit of $5,000. if none of them
advertise, each will make a profit of $10,000. if someone announces
and the other does not, so whoever advertises will earn a
profit of $12,000 and the other will win $2,000. in this release
of the prisoners’ dilemma, if the game is only played once, Laurel
he must
A.
advertise, but if the game is to be
repeated several times, it probably shouldn’t advertise.
B
announce, and if the game is going to be
repeated several times, she should probably announce it again.
vs.
no advertising, but if the game is
to repeat several times, she should probably announce it.
D.
no advertising, and if the game is
to repeat many times that she should not announce yet.
A.
advertise, but if the game is to be
repeated several times, it probably shouldn’t advertise.
B
announce, and if the game should be
repeated several times, she should probably announce it again.
vs.
no advertising, but if the game is
to repeat several times, she should probably announce it.
D.
no advertising, and if the game is
to repeat many times that she should not announce yet.
A.
advertise, but if the game is to be
repeated several times, it probably shouldn’t advertise.
A. advertise, but if the game is
repeated several times, it probably shouldn’t advertise.
B
announce, and if the game should be
repeated several times, she should probably announce it again.
B. advertise, and if the game is
repeated several times, she should probably announce it again.
vs.
no advertising, but if the game is
to repeat several times, she should probably announce it.
C. no advertising, but if the game is
to repeat several times, she should probably announce it.
D.
no advertising, and if the game is
to repeat many times that she should not announce yet.
D. no advertising, and if the game is
to repeat many times that she should not announce yet.
Answer 1
1) The answer is B.
In the oligopoly, there will be few firms in the industry and
monopolistic industry, there will be many enterprises producing
differentiated products.
2) The answer is A.
The more the number of companies increases, the more the
competition and prices will drop and production will increase
close to the optimal social product.
3) The answer is C.
There is usually a higher price in monopoly because there is only
the single seller and the perfectly competitive company have the lowest price.
Generally, the monopolist has a higher price than the oligopoly, so
monopolistic competition then perfect competition.
4) The answer is C.
Oligopolistic cooperation will turn oligopoly into monopoly,
which will increase the price and lower the level of production which is
unwanted in society.
5) The answer is B. 2238
Herfindahl-Hirchman index = sum of squares of market share
= (30*30)+(25*25)+(18*18)+(17*17)+(10*10)
= 900 + 625 + 324 + 289 + 100
= 2238.
6) The answer is B.
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