Question : 31) The figure above shows a ________ where ________ firm(s) : 1238888

 

 

31) The figure above shows a ________ where ________ firm(s) produce(s) ________.

A) natural oligopoly; 3; 30 units each

B) natural duopoly; 2; 45 units each

C) natural monopoly; 2; 90 units

D) monopoly; 1; 90 units

E) natural monopoly; 3; 90 units each

 

32) The figure above shows that ________ occurs at ________ units and that ________ firms should share the market.

A) the efficient scale; 30; 3

B) the lowest marginal cost; 30; 3

C) the efficient scale; 45; 2

D) the highest level of demand; 45; 2

E) an economic profit; 45; 2

33) When a city licenses only 3 taxi firms to serve the market, the city has created a

A) cartel.

B) legal monopoly.

C) monopolistically competitive market.

D) legal oligopoly.

E) natural oligopoly.

 

34) One way to identify oligopoly is to

A) determine the market’s minimum price.

B) determine the market’s maximum price.

C) determine whether the firm’s ATC exceeds price.

D) use the Herfindahl-Hirschman Index (HHI).

E) use the Efficiency test.

 

35) Oligopoly is a market structure in which

A) many firms each produce a slightly differentiated product.

B) one firm produces a unique product.

C) a small number of firms compete.

D) many firms produce an identical product.

E) the number of firms is so small that they do not compete with each other.

36) The fact that firms in oligopoly are interdependent means that

A) there are barriers to entry.

B) one firm’s profits are affected by other firms’ actions.

C) they can produce either identical or differentiated goods.

D) there are too many of them for any one firm to influence price.

E) they definitely compete with each other so that the price is driven down to the monopoly level.

 

37) Collusion results when a group of firms

i.act separately to limit output, lower prices, and decrease economic profits.

ii.act together to limit output, raise prices, and increase economic profits.

iii.in the United States legally fix prices.

A) i only

B) ii only

C) iii only

D) i and iii

E) ii and iii

 

38) A cartel is a group of firms

A) acting separately to limit output, lower price, and decrease economic profit.

B) acting together to limit output, raise price, and increase economic profit.

C) legally fixing prices.

D) acting together to erect barriers to entry.

E) that compete primarily with each other rather than the other firms in the market.

39) A market with only two firms is called a

A) duopoly.

B) two-firm monopolistic competition.

C) two-firm monopoly.

D) cartel.

E) two-firm quasi monopoly.

 

40) The efficient scale of one firm is 20 units and the average total cost at the efficient scale is $30. The quantity demanded in the market as a whole at $30 is 40 units. This market is

A) a natural duopoly.

B) a legal duopoly.

C) a natural monopoly.

D) a legal monopoly.

E) monopolistically competitive.

 

41) Even though four firms can profitably sell hotdogs downtown, the government licenses only two firms. This market is a

A) natural duopoly.

B) legal duopoly.

C) natural monopoly.

D) legal monopoly.

E) market-limited oligopoly.

42) To determine if a market is an oligopoly, we need to determine if

A) the market’s HHI is less than 900.

B) there are many firms in the market.

C) the firms are so few that they recognize their mutual interdependencies.

D) the firms make identical or differentiated products.

E) cartels are legal in their market.