question
Firm Market Share(%)
A 40
B 30
C 20
D 5
E 5
This industry shown in this table illustrates
A 40
B 30
C 20
D 5
E 5
This industry shown in this table illustrates
answer
Oligopoly
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Concentration Ratios
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may understate the degree of competition because they ignore imported products
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If there are significant economies of scale in an industry, then
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a firm that is large may be able to produce at a lower unit cost than can a small firm
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(Last Word) Which of the following statements best describes the Internet market structure?
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There are a few large firms, such as Google, Facebook, and Amazon, each dominating a particular sector but always trying to gain market share in another sector
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The characteristic most closely associated with oligopoly is
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a few large producers
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Under oligopoly, if one firm in an industry significantly increases advertising expenditures in order to capture a greater market share, it is most likely that other firms in that industry will
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decide to increase advertising expenditures even if it means a reduction in profits
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On the graph, if the oligopolist's MC curve shifts from MC1 to MC2, the firm will charge
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the same price as before and sell the same amount of output; total revenue will remain the same(change happens in the portion of a kinked demand curve)
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If the several oligopolistic firms that compose an industry behave collusively, the resulting price and output will most likely resemble those of
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Pure Monopoly
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Oligopoly demand and marginal revenue curves are based on the assumption that
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rivals will ignore a price increase but match a price decrease
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A prediction from the kinked demand curve model of oligopoly is that, for an individual firm, small changes in
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marginal cost will not lead to changes in price or output
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In a Oligopoly equilibrium, a firm
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is realizing an economic profit of whatever variable(Ex:a) x d(or ad) per unit(variable is determined wherever ATC = D)
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A potential negative effect of advertising for society is that it can
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be self-canceling and contribute to economic inefficiency
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Advertising can enhance economic efficiency when it
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expands sales such that firms achieve substantial economies of scale
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Advertising can impede economic efficiency when it
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increases entry barriers
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Which of the following factors tends to foster the development of an oligopoly?
answer
economies of scale
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In an oligopolistic market, there is likely to be
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neither allocative nor productive efficiency
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The economic inefficiency in an oligopoly may be reduced by the following, except
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aggressive advertising by rivals
question
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answer
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