Question

QUESTION 1

Which of the following is always a characteristic of the oligopoly market structure?

		Many sellers, each small in size relative to the overall market.
		Few sellers.
		All sellers produce identical products.
		Easy, low-cost entry and exit.

QUESTION 2

The industry that most closely approximates the conditions of the oligopoly model is:

		Restaurant.
		Retail clothing.
		Airlines in the U.S.
		The local cable company.

QUESTION 3

In which of the following market structures must the price and output decisions of an individual firm include the possible price and output reactions of the firm's rivals?

		Monopoly.
		Oligopoly.
		Perfect competition.
		Monopolistic competition

QUESTION 4

A characteristic of an oligopoly is:

		mutual interdependence in pricing decisions.
		independent pricing decisions.
		lack of control over prices.
		None of the above.

QUESTION 5

A common characteristic of oligopolies is:

		Products can be homogeneous or differentiated.
		independent pricing decisions.
		low industry concentration.
		few or no economies of scale.

QUESTION 6

Which of the following best describes a cartel?

		As a monopolist, a group of perfectly competitive firms that jointly reduce output and raise the price.
		As a monopolist, a group of cooperating oligopolists that jointly reduce output and raise the price.
		A monopolist that reduces output and raises price.
		A group of identical non-cooperative oligopolists that are able to reproduce a monopoly equilibrium through price rivalry.

Answer 1

Answer

1.Few sellers
There are few large firms which supply the market demand. The entry to an oligopolistic market is restricted.

2.Airlines in the U.S.
This is an example of an oligopoly as there are few large fimrs in the airlines indutry.

3.Oligopoly.
In an oligopoly firms must keeop in mind what the competitor is doing at all times as priceing strategy is very complicated.

4.mutual interdependence in pricing decisions.
The pricing decisions in oligopoly are dependent by the decisions of rivals and cartels if any.

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