Question 1

5 out of 5 points
If OPEC is an effective cartel,

Answer Selected Answer:

members agree on output quotas

Correct Answer:

members agree on output quotas

Question 2
5 out of 5 points

Which of the following is true for a firm operating under perfect competition, monopolistic competition, and monopoly?
Answer Selected Answer:

Profits are maximized when marginal cost equals marginal revenue

Correct Answer:

Profits are maximized when marginal cost equals marginal revenue

Question 3
5 out of 5 points

Monopolistic competition is inefficient because:

Answer Selected Answer:

firms have excess capacity in the long run

Correct Answer:

firms have excess capacity in the long run

Question 4
5 out of 5 points

Firms in a monopolistically competitive market structure maximize their profit by producing an output where:
Answer Selected Answer:

marginal revenue equals marginal cost

Correct Answer:

marginal revenue equals marginal cost

Question 5
5 out of 5 points

Which of the following most closely approximates the conditions of a monopolistically competitive market?
Answer Selected Answer:

The restaurant industry, which is characterized by firms producing a differentiated product in a market with low entry barriers

Correct Answer:

The restaurant industry, which is characterized by firms producing a differentiated product in a market with low entry barriers
0 out of 5 points

Question 6

Mutual interdependence among firms in an oligopoly means that:

Answer Selected Answer:

firms never practice leadership

Correct Answer:

it is difficult to know how firms will react to decisions of rivals

Question 7
0 out of 5 points

A market situation where a small number of sellers dominate the entire industry is called:
Answer Selected Answer:

monopolistic competition
Correct Answer:

oligopoly

Question 8
0 out of 5 points

In the long run, both monopolistic competition and perfect competition result in:
Answer Selected Answer:

excess capacity
Correct Answer:

zero economic profit for firms

Question 9
5 out of 5 points

An oligopoly is a market structure in which:

Answer Selected Answer:

there are few firms selling either a homogeneous or differentiated product there are few firms selling either a homogeneous or differentiated product

Correct Answer:

Question 10
5 out of 5 points

When Pepsi is considering a price hike, it needs to consider how Coke may react. This situation is called:

Answer Selected Answer:

mutual interdependence
Correct Answer:

mutual interdependence