WHICH OF THE FOLLOWING CHARACTERISTICS DISTINGUISHES OLIGOPOLY FROM OTHER MARKET STRUCTURES?The market system is not entirely fair but it creates incentives to increase supplies and I improve standards of living.
1- Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?
a. The market system is not entirely fair but it creates incentives to increase supplies and I improve standards of living.
b. The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own.
c. Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient.
d. There will be no shortages under the first-come first-serve basis of allocation.
e. A random process of allocation is fair in the sense that everyone gains and there are no losers.
2- Under perfect competition, at the profit maximizing level of output:
a. price is greater than marginal revenue.
b. price is equal to marginal revenue.
c. marginal revenue is equal to zero.
d. the marginal revenue curve is downward sloping.
e. the average revenue curve is upward sloping.
3- The ordering of market structures from most market power to least market power (where market power is the ability to set its own price) is:
a. monopoly, monopolistic competition, oligopoly, perfect competition.
b. perfect competition, monopolistic competition, oligopoly, monopoly.
c. oligopoly, monopoly, monopolistic competition, perfect competition.
d. monopoly, oligopoly, monopolistic competition, perfect competition.
e. monopoly, perfect competition, monopolistic competition, oligopoly.
4- An industry which has no barriers to entry, no product promotion strategy, a standardized product, and a very large number of firms operating within it, is said to have:
a. a monopoly market structure.
b. perfect competition.
c. Monopsonistic competition.
d. monopolistic competition.
e. an oligopoly market structure.
5- In a perfectly competitive industry, the price of good A is $2. If a firm in this industry decides to increase its price to $2.50, it will:
a. realize an increase in profits of $.50 per unit.
b. be able to increase the quantity sold.
c. be unable to sell any quantity of good A that is produced.
d. lose some of its customers in the market.
e. experience a decrease in profits of $.50 per unit.
6- Monopoly is a market structure in which:
a. there are significant barriers to the entry of new firms.
b. the firms face a perfectly elastic demand curve.
c. there are a large number of close substitutes for the good.
d. a homogeneous product is sold.
e. the firms are price takers.
7- Steve is about to start up a business in a monopolistically competitive market. Which of the following can he expect?
a. He can expect market entry to be difficult as there exist entry barriers.
b. He can expect to enjoy a huge market power.
c. He can expect to face a highly inelastic demand curve.
d. He can expect to find close substitutes of the product he is planning to produce.
e. He can expect to face an infinitely elastic demand curve.
8- Which of the following characteristics distinguishes oligopoly from other market structures?
a. Firms operating in an oligopoly are independent of each other.
b. Firms operating in an oligopoly are interdependent.
c. Oligopoly is the simplest of all the other market structures.
d. An oligopolist does not face a downward-sloping demand curve.
e. Entry into an oligopolistic market is easier than entry into a monopolistically competitive market.
9- The demand curve faced by a perfectly competitive firm is:
a. perfectly inelastic.
b. relatively elastic
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