CH25 - CHAPTER 25 Monopolistic Competition and Oligopoly...

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CHAPTER 25 Monopolistic Competition and Oligopoly Topic Question numbers ___________________________________________________________________________________________________ 1. Monopolistic competition: definition; characteristics 1-17 2. Demand curve 18-24 3. Price-output behavior 25-70 4. Efficiency aspects 71-80 5. Oligopoly: definition; characteristcs 81-103 6. Concentration ratio; Herfindahl Index 104-127 7. Game theory 128-139 8. Kinked-demand curve model 140-159 9. Collusion; cartels; price leadership 160-177 10.Advertising 178-183 11.Efficiency aspects 184-187 12.Review of four structures 188-209 Last Word 210-214 True-False 215-234 ___________________________________________________________________________________________________ Multiple Choice Questions Monopolistic competition: definition; characteristics 1. Monopolistic competition means: A) a market situation where competition is based entirely on product differentiation and advertising. B) a large number of firms producing a standardized or homogeneous product. C) many firms producing differentiated products. D) a few firms producing a standardized or homogeneous product. 2. Monopolistic competition is characterized by a: A) few dominant firms and low entry barriers. B) large number of firms and substantial entry barriers. C) large number of firms and low entry barriers. D) few dominant firms and substantial entry barriers. 3. Under monopolistic competition entry to the industry is: A) completely free of barriers. B) more difficult than under pure competition but not nearly as difficult as under pure monopoly. C) more difficult than under pure monopoly. D) blocked. Page 1
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4. Monopolistic competition resembles pure competition because: A) both industries emphasize nonprice competition. B) in both instances firms will operate at the minimum point on their long-run average total cost curves. C) both industries entail the production of differentiated products. D) barriers to entry are either weak or nonexistent. 5. Which of the following is not a basic characteristic of monopolistic competition? A) the use of trademarks and brand names B) recognized mutual interdependence C) product differentiation D) a relatively large number of sellers 6. Nonprice competition refers to: A) competition between products of different industries, for example, competition between aluminum and steel in the manufacture of automobile parts. B) price increases by a firm that are ignored by its rivals. C) advertising, product promotion, and changes in the real or perceived characteristics of a product. D) reductions in production costs that are not reflected in price reductions. 7. Which of the following is not characteristic of monopolistic competition? A)
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CH25 - CHAPTER 25 Monopolistic Competition and Oligopoly...

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