Question : 14.2  Oligopoly 1) Which of the following a difference between an : 1377523

14.2  Oligopoly

1) Which of the following is a difference between an oligopoly model with homogeneous products and a monopoly?

A) Firms in an oligopoly with homogeneous products earn positive economic profits in the long run while a monopoly earns zero economic profit in the long run.

B) Firms in an oligopoly with homogeneous products face stiff competition from its rivals while there is no competition in a monopoly.

C) There are huge barriers to entry in an oligopoly with identical products while there are no barriers to entry in a monopoly.

D) Firms in an oligopoly with identical products charge a price higher than marginal cost in the long run while a monopoly charges a price lower than marginal cost in the long run.

2) Which of the following is a difference between an oligopoly with differentiated products and a monopolistic competition?

A) There are no barriers to entry in an oligopoly with differentiated products while there are huge barriers to entry in a monopolistic competition.

B) There are huge barriers to entry in an oligopoly with differentiated products while there are minimal barriers to entry in a monopolistically competitive market.

C) Firms in an oligopoly market with differentiated products charge a price higher than marginal cost in the long run while firms in a monopolistic competition charge a price lower than marginal cost in the long run.

D) Firms in an oligopoly with differentiated products charge a price lower than average total cost in the long run while firms in a monopolistic competition earn a price higher than average total cost in the long run.

3) Which of the following is a feature of an oligopoly market?

A) There is a large number of sellers in this market.

B) There are no barriers to entry in this market.

C) Each firm in this market earns zero economic profit.

D) Each firm’s action affects the decisions of its rival.

4) An industry with only two competing firms is called a ________.

A) duopoly

B) perfect competition

C) monopoly

D) monopolistic competition

5) An oligopoly model in which sellers compete on prices rather than quantities is called a ________ model.

A) Bertrand

B) Cournot

C) Ricardian

D) Keynesian

6) There are two firms in an industry and their products are perfect substitutes for each other. Each firm had a market share of 50% and charged equal prices. However, when the demand for the good declined due to a recession, Firm A lowered its price to increase sales. Firm B responded by lowering its price further. This is an example of the ________ of oligopoly.

A) Bertrand model

B) Cournot model

C) Ricardian model

D) Keynesian model

7) Refer to the scenario above. The demand for Sporty’s soccer balls is 1,250 units if ________.

A) the price charged by Sporty is higher than the price charged by Go!

B) the price charged by Go! is higher than the price charged by Sporty

C) the price charged by Sporty is equal to the price charged by Go!

D) the price charged by Sporty is higher than the cost of production of each ball

8) Refer to the scenario above. The demand for Sporty’s soccer balls is 2,500 units if ________.

A) the price charged by Sporty is higher than the price charged by Go!

B) the price charged by Go! is higher than the price charged by Sporty

C) the price charged by Sporty is equal to the price charged by Go!

D) the price charged by Go! is higher than the unit cost of producing a ball

9) Refer to the scenario above. The demand for Go!’s soccer balls is 2,500 units if ________.

A) the price charged by Sporty is higher than the price charged by Go!

B) the price charged by Go! is higher than the price charged by Sporty

C) the price charged by Sporty is equal to the price charged by Go!

D) the price charged by Go! is higher than the cost of producing a ball