Question :
18.2 The Oligopolists’ Dilemma
1) When oligopolies seek to operate as : 1241341
18.2 The Oligopolists’ Dilemma
1) When oligopolies seek to operate as a single-price monopoly, the firms produce at the point where
A) P = MC.
B) MR = MC.
C) P < ATC.
D) P = MR.
E) MC = ATC.
2) When firms in an oligopoly successfully collude and do not cheat on a cartel agreement, they can make a long-run economic profit similar to
A) perfect competition.
B) monopoly.
C) monopolistic competition.
D) non-colluding oligopolies.
E) the firms in regulated industries.
3) If firms in an oligopolistic industry successfully collude and form a cartel, what price and output will result?
A) the monopoly price and output
B) the competitive price and output
C) the monopolistically competitive price and output
D) a price higher than the monopoly price and, because there is more than one firm in the industry, more output than the monopoly amount
E) a price lower than the competitive price and, because there are only a few firms in the industry, less output than the competitive amount
4) When oligopolies operate like firms in perfect competition, the firms produce at the point where the
A) price is less than the marginal cost.
B) marginal cost equals the price.
C) price exceeds the marginal cost by the greatest amount.
D) price equals the average total cost.
E) marginal cost equals the average total cost.
5) If firms in an oligopolistic industry consistently cut their price to sell more output, what price and output will result?
A) the monopoly price and output
B) the competitive price and output
C) the monopolistically competitive price and output
D) a price lower than the competitive price and less output than the competitive amount
E) a price lower than the competitive price and more output than the competitive amount
6) The range in which a duopoly's output falls is less than or equal to the output level in ________ and more than or equal to the output level in ________.
A) monopolistic competition; monopoly
B) monopolistic competition; perfect competition
C) perfect competition; monopoly
D) monopoly; monopolistic competition
E) monopoly; perfect competition
7) In an oligopoly, output is
A) less than the output in monopoly.
B) greater than the output in perfect competition.
C) in all circumstances the same as the output in perfect competition.
D) somewhere between the output in monopoly and that in perfect competition outcomes.
E) in all circumstances the same as the output in monopoly.
8) The possible alternatives for an oligopoly range from the monopoly case with ________ to the perfectly competitive case with ________.
A) high output; low output
B) low prices; high prices
C) low profits; high profits
D) low output; high output
E) no cooperation among the firms; much cooperation among the firms
9) The above figure shows the market demand curve for long-distance land-based telephone calls. Suppose the marginal cost of a long-distance telephone call is 2¢ a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. If the firms in the industry operate as perfect competitors, there are ________ minutes of calls made per hour.
A) between 0 and 3 million
B) more than 3 million and less than or equal to 5 million
C) more than 5 million and less than or equal to 7 million
D) more than 7 million and less than or equal to 9 million
E) more than 9 million
10) The above figure shows the market demand curve for long-distance land-based telephone calls. Suppose the marginal cost of a long-distance telephone call is 2¢ a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. If the firms in the industry operate as a monopoly, there are ________ minutes of calls made per hour.
A) between 0 and 3 million
B) more than 3 million and less than or equal to 5 million
C) more than 5 million and less than or equal to 7 million
D) more than 7 million and less than or equal to 9 million
E) more than 9 million
11) The above figure shows the market demand curve for long-distance land-based telephone calls. Suppose the marginal cost of a long-distance telephone call is 2¢ a minute for a call no matter how many minutes of calls are made and there are 3 firms in the industry. If the firms in the industry operate as perfect competitors, the price of a call is ________ per minute and if the firms in the industry operate as a monopoly, the price of a call is ________ per minute.
A) 2 cents; more than 3 cents and less than 4 cents
B) more than 3 cents and less than 4 cents; more than 3 cents and less than 4 cents
C) 1 cent; 2 cents
D) 2 cents; either equal to or more than 4 cents
E) either equal to or more than 4 cents; 2 cents
