Q15. Statement 1: “The kinked demand curve model of oligopoly assumes that a decrease in price will not be followed by other firms in the industry, but a price increase will.” Statement 2: “Firms in monopolistic competition have high advertising expenses because they want to create the perception that their product is different from their competitors’ products when the competing products are actually quite similar.” With respect to these statements: A) only one is correct. B) both are correct. C) both are incorrect.
Q16. If an oligopoly is characterized by fierce competition, in long-run equilibrium the firms in the market will earn:
A) substantial economic losses. B) substantial economic profits. C) zero economic profits.
Q17. Assume that a firm in an oligopoly market believes the demand curve for its product is more elastic above a specific price than below this price. This belief is most closely associated with which of the following models? A) Dominant firm model. B) Variable elasticity model. C) Kinked demand model.
Q18. Firms in perfectly competitive markets and firms operating in a market characterized by monopolistic competition have several things in common. Which of the following is least likely one of them? Both: A) operate in markets that have low or no barriers to entry. B) face perfectly elastic demand curves. C) maximize economic profit.
Q19. Which of the following regarding monopolistic competition is most accurate? A) Each firm produces a differentiated product. B) Zero barriers to entry and exit exist. C) There are very few independent sellers.
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发表于 2009-1-15 10:13
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