Oligopoly

Which of the following best describes an oligopoly?

• many monopolistically competitive firms

• a few firms sharing monopoly power

• a former monopoly that has been broken up by the government

• a government-granted franchise or monopoly

Collusion most frequently occurs in industries that are

• oligopolistic

• monopolistically competitive

• monopolistic

• perfectly competitive

An oligopoly is a market structure in which many firms sell products that are similar but not identical

• TRUE

• FALSE

The market for crude oil is an example of an oligopolistic market

• TRUE

• FALSE

The unique feature of an oligopoly market is that the actions of one seller have a significant impact on the profits of all of the other sellers in the market

• TRUE

• FALSE

When oligopolists collude and form a cartel, the outcome in the market is similar to that generated by a perfectly competitive market

• TRUE

• FALSE

The greater the number of firms in the oligopoly, the more the outcome of the market looks like that generated by a monopoly

• TRUE

• FALSE

Cooperation is easily maintained in an oligopoly because cooperation maximizes each individual firm's profits

• TRUE

• FALSE

The dominant strategy for an oligopolist is to cooperate with the group and maintain low production regardless of what the other oligopolists do

• TRUE

• FALSE

If oligopolists engagein collusion and successfully form a cartel, the market outcome is

• the same as if it were served by a monopoly

• The same as if it were served by competitive firms

• The same as if it were served by competitive firms

• Known as Nash equilibrium