Question : 11) The value of the four-firm concentration ratio that many : 1244651

11) The value of the four-firm concentration ratio that many economists consider indicative of the existence of an oligopoly in a particular industry is

A) anything greater than 10 percent.

B) anything greater than 20 percent.

C) anything greater than 30 percent.

D) anything greater than 40 percent.

12) Which of the following is not a shortcoming of the concentration ratio as a measure of the extent of competition in an industry?

A) Concentration ratios do not include sales in the United States by foreign firms.

B) Concentration ratios are calculated for the national market, even though the competition in some industries is mainly local.

C) Concentration ratios assign weights to only the four largest firms in an industry.

D) Concentration ratios do not address the fact that competition sometimes exists between firms in different industries.

13) The “Discount Department Stores” industry is highly concentrated. What does this mean?

A) There are many large stores such as Wal-Mart, Target, Kohl’s, in this industry.

B) A few large stores account for a significant portion of industry sales.

C) There is cut-throat competition in this industry because there are no entry barriers.

D) The sales volume in this industry is consistently high.

14) Oligopolies are difficult to analyze because

A) the firms are so large.

B) demand and cost curves do not exist for these types of industries.

C) how firms respond to a price change by a rival is uncertain.

D) oligopolies are a recent development so economists have not had time to develop models.

15) In an oligopoly market

A) the pricing decisions of all other firms have no effect on an individual firm.

B) individual firms pay no attention to the behavior of other firms.

C) advertising of one firm has no effect on all other firms.

D) one firm’s pricing decision affects all the other firms.

16) An oligopolist’s demand curve is

A) identical to that of a perfect competitive firm.

B) identical to that of a monopolistically competitive firm.

C) vertical on a price quantity diagram.

D) unknown because a response of firms to price changes by rivals is uncertain.

17) Marginal revenue for an oligopolist is

A) identical to the demand for the firm’s product.

B) difficult to determine because the firm’s demand curve is typically unknown.

C) downward sloping beneath the firm’s demand curve.

D) horizontal on a price-quantity diagram.

18) Which of the following is not a reason why government officials are willing to impose entry barriers?

A) to raise revenue

B) to encourage innovation which may improve the standard of living in the long run

C) to increase economic efficiency

D) to promote an equitable distribution of income

19) Interdependence of firms is most common in

A) monopolistically competitive industries.

B) monopolistic industries.

C) monopolistically competitive and oligopolistic industries.

D) oligopolistic industries.

20) Oligopolies exist and do not attract new rivals because

A) of competition.

B) of barriers to entry.

C) the firms keep profits and prices so low that no rivals are attracted.

D) there can be no product differentiation.