WorksheetsMONOPOLISTIC COMPETITION AND OLIGOPOLY
Total questions: 20
Worksheet time: 15mins
What differs monopolistic competition from perfect competition?
product differentiation
long-run inefficiency
barriers to entry
the short-run profits and losses possibility
In monopolistic competition producers....
have a full ability to set prices
have some ability to set prices
have no ability to set prices
Which one of the following statements is not a characteristic of monopolistic competition?
Ease of entry into the industry
Product differentiation
A relatively large number of sellers
A homogenous product
Which of the following industries is the best example of monopolistic competition?
Wheat
Restaurant
Automobile
Water service
What type of products will firms produce in monopolistic competition?
Firms produce significantly differentiated products
Firms produce slightly differentiated products
Firms produce homogenous products with one modification
Firms produce a variety of different products
How can products be differentiated?
Brand name
Colour
Appearance
Packaging design
All of the above
which one of these is NOT an assumption of the monopolistic competition?
there are many firms
the firms are relatively small
the products the firms supply are indistinguishable
In order to increase their profit, the producers in the monopolistic competition...
can increase their price however they want
can increase their price to some degree
can reduce the quantity supplied
none of the answers are correct
The demand in the monopolistic competition is
perfectly elastic
perfectly inelastic
elastic
inelastic
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
Firms in an oligopoly are interdependent, so if one firm cuts the price, others are_____.
raise prices
forced to follow
not likely to follow
stay the same
Which of the following industries are Oligopolies?
telecom
oil & gas
clothes industry
farming industry
Collusion most frequently occurs in industries that are
oligopolistic
monopolistically competitive
monopolistic
perfectly competitive
We are in non-collusive oligopoly. Firm A and Firm B produces at the same price level. What should Firm A do in order to increase its profit after Firm B lowers its price?
Higher their price
Maintain their price
Lower their price
A Coup
Which of the following usually results from colluding firms?
Less is produced
Profit decreases
Prices are higher
