Chapter 14 Econ Hw Questions

A monopoly will have a Herfindahl-Hirschman index equal to: a. 10,000. b. 1,000. c. 1. d. 100.

a. 10,000

A firm that is in an oligopoly knows that its _____ affect its _____ and that the _____ of its rivals will affect it. a. actions; rivals; reactions b.price changes; total revenue in a positive way; reactions c. price increases; total revenue in the long run only; large but not small price changes d. actions rarely; rivals; actions

a. actions; rivals; reactions

Overt collusion exists if: a. firms agree openly on price and output and they jointly make other decisions aimed at achieving monopoly profits. b. competition among a large number of small firms generates a stable market price. c. competition among a large number of small firms generates similar but slightly different prices. d. smaller firms in an industry tacitly agree to charge the same price as the largest firm.

a. firms agree openly on price and output and they jointly make other decisions aimed at achieving monopoly profits.

One framework used to analyze strategic choices is: a. perfect competition. b. the tacit supply curve model. c. game theory. d. risk assessment.

c. game theory

Oligopoly is a market structure that is characterized by a _____ number of _____ firms producing _____ products. a. small; independent; identical or differentiated b. large; relatively small independent; identical c. large; relatively small independent; differentiated d. small; interdependent; identical or differentiated

d. small; interdependent; identical or differentiated