113. If an industry evolves from monopolistic competition to oligopoly, we would expect:A. the four-firm concentration ratio to decrease.B. the four-firm concentration ratio to increase.C. the four-firm concentration ratio to remain the same.D. barriers to entry to weaken.Answer: B

Topic: Concentration ratios; Herfindahl IndexLearning Objective: 14-03: Describe the characteristics of oligopoly.Difficulty: 2 MediumBloom’s: Level 2 UnderstandAACSB: Reflective Thinking[Question]114. Interindustry competition means that:

Topic: Concentration ratios; Herfindahl IndexLearning Objective: 14-03: Describe the characteristics of oligopoly.Difficulty: 2 MediumBloom’s: Level 2 UnderstandAACSB: Analytic [Question]115. If you sum the squares of the market shares of each firm in an industry (as measured by percent of industry sales), you are calculating the:

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Chapter 014 Monopolistic Competition and OligopolyTopic: Concentration ratios; Herfindahl IndexLearning Objective: 14-03: Describe the characteristics of oligopoly.Difficulty: 1 EasyBloom’s: Level 1 RememberAACSB: Analytic [Question]116. The Herfindahl Index:A. measures the prices charged by oligopolistic manufacturers.B. is another name for the four-firm concentration ratio.C. tells us whether oligopolistic firms are engaging in collusion.D. gives much greater weight to larger firms than to smaller firms in an industry.Answer: DTopic: Concentration ratios; Herfindahl IndexLearning Objective: 14-03: Describe the characteristics of oligopoly.Difficulty: 2 MediumBloom’s: Level 2 UnderstandAACSB: Reflective Thinking [Question]117. If the four-firm concentration ratio in an oligopolistic industry is 100 percent and each firm has an equal percentage of sales, the Herfindahl Index is:A. 10,000.B. 2,500.C. 3,750.D. 1,000.Answer: BTopic: Concentration ratios; Herfindahl IndexLearning Objective: 14-03: Describe the characteristics of oligopoly.Difficulty: 2 MediumBloom’s: Level 3 ApplyAACSB: Analytic [Question]