7.2 Monopolistic Competition and Oligopoly

Cartels are illegal in the United States.

• True
• False

There are high barriers to entry in the market in perfect competition.

• True
• False

Firms in monopolistic competition can leave the market easily in the long run.

• True
• False

An oligopoly is a market dominated by just a few firms.

• True
• False

Firms in monopolistic competition never operate with excess capacity.

• True
• False

A firm operating at minimum efficient scale is taking advantage of economies of scale. 

• True
• False

How many firms are in a monopoly? 

• one
• two
• three
• unlimited

Which of the following helps oligopolistic firms decrease competition and increase profit? 

• creating a surplus 
• decreasing barriers to entry 
• collusion
• increasing product differentiation

Which of the following is true about monopolistic competition

• each firm’s demand curve slopes upward
• firms do not have control over price 
• barriers to entry into the market are low
• all products are the same in the market

Which of the following is an example of monopolistic competition? 

• Electric Services
• corn
• shares of stock
• books