1.Refer to the above diag

1.Refer to the above diag

1.Refer to the above diagrams, which pertain to monopolistically competitive firms. Long-run equilibrium is shown by:a.diagram a only.b.Diagram b only.c.Diagram c onlyd.Both diagrams b and c2.In long-run equilibrium monopolistic competition entails:a.An efficient allocation of resources.b.An over allocation of resources.c.An under allocation of resources.d.Production at the minimum attainable average total cost.3.The more elastic a monopolistic competitor?s long-run demand curve, the:a.Greater its excess capacity.b.The higher its price relative to that of a pure competitor?s having the same cost curves.c.Lower its long-run profit.d.Lower its average total cost at its profit maximizing level of output.1.Oligopoly is difficult to analyze primarily because:a.The number of firms is too large to make collusion understandable.b.The price and output decisions of any one firm depend on the reactions of its rivals.c.Output may be either homogenous or differentiated.d.Neither allocative nor productive efficiency is achieved.2.If an industry evolves from monopolistic competition to oligopoly, we would expect:a.The four-firm concentration ratio to decrease.b.The four-firm concentration ratio to increase.c.The four-firm concentration ratio to remain the same.d.Barriers to entry to weaken.3.If the several oligopolistic firms that comprise an industry behave collusively, the resulting price and output will most likely resemble those of:a.Bilateral monopoly.b.Pure monopoly.c.Monopolistic competition.d.Pure competition.4.Industries X and Y both have four-firm concentration ratios of 65 percent, but the Herfindahl index for X is 1,500 while that for Y is 2,000. These data suggest:a.Greater market power in X than in Yb.Greater market power in Y than in X.c.That X is more technologically progressive than Y.d.That price competition is stronger in Y than in X.1.Refer to the above diagram where in the numerical data show profits in millions of dollars. Beta?s profits are shown in the northeast corner and Alpha?s profits in the southwest corner of each cell. If Beta commits to a high-price policy, Alpha will gain the largest profit by:a.Also adopting a high-price policyb.Adopting a low-price policy.c.Adopting a low-price policy, but only if Beta agree to do the same.d.Engaging in non-price competition only.2.Three major means of collusion by oligopolists are:a.Cartels, informal understanding, and price leadership.b.Market sharing, mutual interdependence, and product differentiation.c.Cartels, kinked-demand pricing, and product differentiation.d.Informal understandings, P=MC pricing, and mutual nterdependence.

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