7 a four firm concentration ratio measures a the

7) A four - firm concentration ratio measures
A) the price elasticity of demand among the four largest firms in an industry.
B) the number of firms in an industry.
7)
C) the extent to which industry sales are concentrated among the four largest firms in the
industry.
D) the price elasticity of demand in an industry.
Answer: C
Diff: 1 Page Ref: 460/460
Topic: Concentration Ratio
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
2

8) As a measure of competition in an industry, concentration ratios have several flaws. One of these
flaws is that concentration ratios
C) assume that all industries have low barriers to entry.
8)
D) are calculated for the national market, even though competition in some industries is mainly
local.
Answer: D
Diff: 2 Page Ref: 460/460
Topic: Concentration Ratio
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
9) Which of the following is not a characteristic of oligopoly? 9)
Diff: 1 Page Ref: 460/460
Topic: Characteristics of Oligopoly
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
10) Which of the following is not a barrier to entry? 10)
Diff: 1 Page Ref: 461/461
Topic: Barriers to Entry
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
11) Economies of scale will create a barrier to entry in an oligopoly industry when
A) the industry ʹ s four - firm concentration ratio is less than 40 percent.
B) a firm ʹ s minimum efficient scale occurs where long - run average total costs are constant.
C) the typical firm ʹ s long - run average total cost curve reaches a minimum at a level of output
11)
that is a small fraction of total industry sales.
D) the typical firm ʹ s long - run average total cost curve reaches a minimum at a level of output
that is a large fraction of total industry sales.
Answer: D
Diff: 2 Page Ref: 461/461
Topic: Economies of Scale
Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in
oligopolies
AACSB: Reflective Thinking
3