Ag Econ quiz 8
A breakdown in price leadership leading to successive rounds of price cuts is known as:
a price war
OPEC provides an example of:
an international cartel
Which of the following is the best example of oligopoly?
automobile manufacturing
The kinked-demand curve of an oligopolist is based on the assumption that:
competitors will follow a price cut but ignore a price increase.
The monopolistically competitive seller maximizes profit by producing at the point where:
marginal revenue equals marginal cost.
The restaurant, legal assistance, and clothing industries are each illustrations of:
monopolistic competition.
Which of the following is a unique feature of oligopoly?
mutual interdependence
When a monopolistically competitive firm is in long-run equilibrium:
MR = MC and P > minimum ATC.
Cartels are difficult to maintain in the long run because:
individual members may find it profitable to cheat on agreements.
Game theory:
is the analysis of how people (or firms) behave in strategic situations.