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FFECO Problem Sets Chapter 4
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- 1A market structure characterized by many sellers with each having some pricing power and product differentiation is best described as: A. oligopoly. B. perfect competition. C. monopolistic competition.C. monopolistic competition.
- 2A market structure with relatively few sellers of a homogeneous or standardized product is best described as: A. oligopoly. B. monopoly. C. perfect competition.A. oligopoly.
- 3Market competitors are least likely to use advertising as a tool of differentiation in an industry structure identified as: A. monopoly. B. perfect competition. C. monopolistic competition.B. perfect competition.
- 4Companies most likely have a well-defined supply function when the market structure is: A. oligopoly. B. perfect competition. C. monopolistic competition.B. perfect competition.
- 5Aquarius, Inc. is the dominant company and the price leader in its market. One of the other companies in the market attempts to gain market share by undercutting the price set by Aquarius. The market share of Aquarius will most likely: A. increase. B. decrease. C. stay the same.A. increase.
- 6A company doing business in a monopolistically competitive market will most likely maximize profits when its output quantity is set such that: A. average cost is minimized. B. marginal revenue equals average cost. C. marginal revenue equals marginal cost.C. marginal revenue equals marginal cost.
- 7Oligopolistic pricing strategy most likely results in a demand curve that is: A. kinked. B. vertical. C. horizontal.A. kinked.
- 8Collusion is less likely in a market when: A. the product is homogeneous. B. companies have similar market shares. C. the cost structures of companies are similar.B. companies have similar market shares.
- 9If companies earn economic profits in a perfectly competitive market, over the long run the supply curve will most likely: A. shift to the left. B. shift to the right. C. remain unchanged.B. shift to the right.
- 10Over time, the market share of the dominant company in an oligopolistic market will most likely: A. increase. B. decrease. C. remain the same.B. decrease.
- 11A government entity that regulates an authorized monopoly will most likely base regulated prices on: A. marginal cost. B. long-run average cost. C. first-degree price discrimination.B. long-run average cost.
- 12One disadvantage of the Herfindahl-Hirschman index is that the index: A. is difficult to compute. B. fails to reflect low barriers to entry. C. fails to reflect the effect of mergers in the industry.B. fails to reflect low barriers to entry.
- 13In an industry consisting of three companies that are small-scale manufacturers of an easily replicable product unprotected by brand recognition or patents, the most representative model of company behavior is: A. oligopoly. B. perfect competition. C. monopolistic competition.B. perfect competition.
- 14Deep River Manufacturing is one of many companies in an industry making a food product. Deep River units are identical up to the point they are labeled. Deep River produces its labeled brand, which sells for $2.20 per unit, and house brands for seven different grocery chains that sell for $2.00 per unit. Each grocery chain sells both the Deep River brand and its house brand. The best characterization of Deep River’s market is: A. oligopoly. B. perfect competition. C. monopolistic competition.C. monopolistic competition.
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- Fichas sobre FFECO Problem Sets Chapter 4, creado por Leo Allert el 07/06/2022.
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- Leo Allert
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