Questions on Oligopoly

19013 WordsSep 4, 201277 Pages
Chapter 16 Oligopoly MULTIPLE CHOICE 1. Markets with only a few sellers, each offering a product similar or identical to the others, are typically referred to as a. competitive markets. b. monopoly markets. c. monopolistically competitive markets. d. oligopoly markets. ANSWER: d. oligopoly markets. TYPE: M DIFFICULTY: 1 SECTION: 16.1 2. An oligopoly is a market in which a. there are only a few sellers, each offering a product similar or identical to the others. b. firms are price takers. c. the actions of one seller in the market have no impact on the other sellers’ profits. d. All of the above are correct. ANSWER: a. there are only a few sellers, each offering a…show more content…
TYPE: M DIFFICULTY: 2 SECTION: 16.1 11. One key difference between an oligopoly market and a competitive market is that oligopolistic firms a. are price takers while competitive firms are not. b. are interdependent while competitive firms are not. c. sell completely unrelated products while competitive firms do not. d. sell their product at a price equal to marginal cost while competitive firms do not. ANSWER: b. are interdependent while competitive firms are not. TYPE: M DIFFICULTY: 2 SECTION: 16.1 12. Typical firms in our economy are classified as a. perfectly competitive. b. imperfectly competitive. c. duopolists. d. oligopolists. ANSWER: b. imperfectly competitive. TYPE: M DIFFICULTY: 1 SECTION: 16.1 13. Given that there are approximately 12 companies currently selling cars in the United States, the car market is classified as a. perfectly competitive. b. monopolistically competitive. c. oligopolistic. d. the classification is open to debate. ANSWER: d. the classification is open to debate. TYPE: M DIFFICULTY: 2 SECTION: 16.1 14. When an industry has many firms, the industry is a. an oligopoly if the firms sell differentiated products; it is monopolistically competitive if the firms sell identical products. b. an oligopoly if the firms sell differentiated products; it is perfectly
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