Q11. Which of the following is NOT a characteristic of an oligopoly?

A)     Products can either be similar or differentiated.

B)     There are few sellers.

C)     Relatively small economies of scale.

Q12. Assume that the market for paper supplies and the market for toothpicks have the following characteristics:

The Market for Paper Supplies is comprised of:

§           A large number of independent sellers

§           Differentiated products

§           Low barriers to entry/exit

The Market for Toothpicks is comprised of:

§            A large number of independent sellers

§            Homogeneous products

§            No barriers to entry/exit

The Papyrus Company operates in the market for paper supplies and Wudden Floss operates in the toothpick market. The sales managers for both companies want to know how a change in price will affect the quantity sold.

Which of the following choices best completes the following sentence? If both firms increase prices, the quantity sold by Papyrus Company will:

A)   increase, and the quantity sold by Wudden Floss will decrease.

B)   decrease, and Wudden Floss will sell nothing.

C)   decrease, and so will the quantity sold by Wudden Floss.

Q13. Which of the following is most likely to be considered a characteristic of an oligopolistic industry?

A)   Few barriers to entry.

B)   Many sellers.

C)   A great deal of interdependence among firms.

Q14. Consider the following statements:

Statement 1: “When oligopoly firms cheat on price fixing agreements, the resulting price and output quantity approaches that of perfect competition.”

Statement 2: “Monopolistic competition is inefficient because a large deadweight loss from advertising and marketing costs is a characteristic of this form of competition.”

With respect to these statements:

A)   both are correct.

B)   only one is correct.

C)   both are incorrect.

答案和详解如下：

Q11. Which of the following is NOT a characteristic of an oligopoly?

A)     Products can either be similar or differentiated.

B)     There are few sellers.

C)     Relatively small economies of scale.

Correct answer is C)

Oligopolies have large economies of scale and interdependence among competitors.

Q12. Assume that the market for paper supplies and the market for toothpicks have the following characteristics:

The Market for Paper Supplies is comprised of:

§           A large number of independent sellers

§           Differentiated products

§           Low barriers to entry/exit

The Market for Toothpicks is comprised of:

§            A large number of independent sellers

§            Homogeneous products

§            No barriers to entry/exit

The Papyrus Company operates in the market for paper supplies and Wudden Floss operates in the toothpick market. The sales managers for both companies want to know how a change in price will affect the quantity sold.

Which of the following choices best completes the following sentence? If both firms increase prices, the quantity sold by Papyrus Company will:

A)   increase, and the quantity sold by Wudden Floss will decrease.

B)   decrease, and Wudden Floss will sell nothing.

C)   decrease, and so will the quantity sold by Wudden Floss.

Correct answer is B)

Papyrus Company is an example of a price searcher engaged in monopolistic competition (low barriers to entry). Thus, the company faces a downward sloping demand curve and highly elastic demand. An increase in price will result in fewer units sold. Wudden Floss is an example of a price taker operating in a purely competitive market. Thus, the firm faces a horizontal demand curve and perfectly elastic demand. An increase in price will result in no units sold. In a purely competitive market, the firm must take the market price.

Q13. Which of the following is most likely to be considered a characteristic of an oligopolistic industry?

A)   Few barriers to entry.

B)   Many sellers.

C)   A great deal of interdependence among firms.

Correct answer is C)

An oligopolistic industry has a great deal of interdependence among firms. One firm’s pricing decisions or advertising activities will affect the other firms' demand curves.

Q14. Consider the following statements:

Statement 1: “When oligopoly firms cheat on price fixing agreements, the resulting price and output quantity approaches that of perfect competition.”

Statement 2: “Monopolistic competition is inefficient because a large deadweight loss from advertising and marketing costs is a characteristic of this form of competition.”

With respect to these statements:

A)   both are correct.

B)   only one is correct.

C)   both are incorrect.

Correct answer is B)         

The efficiency of monopolistic competition is not clear. While increased opportunity cost is associated with the intensive marketing and advertising activities that are characteristic of monopolistic competition, consumers definitely benefit from these selling activities because they receive information that often enables them to make better purchasing decisions. Hence the advertising and marketing costs may be more than the efficient amount, but do not represent a deadweight loss.

楼主，最后一题statement 1为什么是正确的呢？当oligopolists 合作设定价格，相当于形成了一个寡头垄断，那么他们制定的价格会高于完全竞争市场的价格，数量也会少啊？

谢谢了～

thx