Question :
31) What do Sony, Microsoft, and Nintendo have in common?
A) : 1387861
31) What do Sony, Microsoft, and Nintendo have in common?
A) Each achieved a dominant position in its industry because it owned a key input in the production of its product.
B) The industry in which each firm competes is an oligopoly because of government-imposed barriers to entry.
C) Each company was founded in the same state.
D) The profitability of each firm depends on its interactions with other firms.
32) Which of the following is not part of an oligopolist’s business strategy?
A) deciding on how to manage relations with suppliers
B) choosing what new technologies to adopt
C) selecting which new markets to enter
D) independently setting a product’s price without consideration of its rivals’ pricing policies
33) Oligopoly differs from perfect competition and monopolistic competition in that
A) barriers to entry are lower in oligopoly industries than they are in perfectly competitive and monopolistically competitive industries.
B) demand and marginal revenue curves are more useful for analyzing oligopoly than they are for analyzing perfect competition and monopolistic competition.
C) because oligopoly firms often react when other firms in their industry change their prices, it is difficult to know what the oligopolist’s demand curve looks like.
D) the concentration ratios of oligopoly industries are lower than they are for perfectly competitive and monopolistically competitive firms.
34) We can draw demand curves for firms in perfectly competitive and monopolistically competitive industries, but not for oligopoly firms. The reason for this is
A) there are no barriers to entry in perfectly competitive and monopolistically competitive industries. There are high barriers to entry in oligopoly industries.
B) we can assume that the prices charged by perfectly competitive and monopolistically competitive firms have no impact on rival firms. For oligopoly this assumption is unrealistic.
C) that perfectly competitive and monopolistically competitive firms are price takers. Oligopoly firms are price makers.
D) perfectly competitive and monopolistically competitive firms sell standardized products. Oligopoly firms sell differentiated products.
35) When large firms in oligopoly markets cut their prices,
A) rival firms will also cut their prices to avoid losing sales.
B) rival firms will not change their prices because most of their customers have signed contracts that commit them to doing business with the same firms for the life of their contracts.
C) we don’t know for sure how rival firms will respond.
D) rival firms will not cut their prices because they fear that the federal government will accuse them of collusion.
36) The fraction of an industry’s sales that are accounted for by the largest firms is called
A) the four-firm competition ratio.
B) the four-firm concentration ratio.
C) the four-firm industry ratio.
D) the four-firm oligopoly ratio.
37) A four-firm concentration ratio measures
A) the extent to which industry sales are concentrated among the four largest firms in the industry.
B) the price elasticity of demand among the four largest firms in an industry.
C) the number of firms in an industry.
D) the price elasticity of demand in an industry.
38) As a measure of competition in an industry, concentration ratios have several flaws. One of these flaws is that concentration ratios
A) assume that all industries have low barriers to entry.
B) assume that a ratio less than 40 percent means an industry is perfectly competitive.
C) assume there are only four firms in an industry.
D) are calculated for the national market, even though competition in some industries is mainly local.
39) Which of the following is not a characteristic of oligopoly?
A) the ability to influence price
B) a small number of firms
C) low barriers to entry
D) interdependent firms
40) Which of the following is not a barrier to entry?
A) an inelastic demand curve
B) economies of scale
C) ownership of a key input
D) a patent
