In contestable markets large oligopolistic firms end up behaving like ?
A. monopolistically competitive firms
B. a cartel
C. perfectly competitive firms
D. a monopoly.
A market is defined as perfectly contestable if ?
A. entry to it and exit from it are both costless
B. entry to it and exit from it are both costly
C. entry to it costless, but exit from it is costless
D. entry to it is costly, but exit from it is costless
The kinked demand curve model of oligopoly assumes the elasticity of demand ?
A. in response to a price increase is less elastic than the elasticity of demand in response to a price decrease
B. is perfectly elastic if price increases and perfectly inelastic if price decreases
C. is constant regardless of whether price increase of decrease.
D. in response to a price increases is more elastic than the elasticity of demand in response to a price decrease
In which of the following circumstances would a cartel be most likely to work ?
A. The market for copper, where there are very few producers and the product is standardized.
B. The fast-food market where there are a large number of producers but the demand for fast food is inelastic
C. The coffee market where the product is standardized and there are a large number of coffee growers.
D. The automobile industry, where there are few producers but there is great product differentiation.
A price- and quantity-fixing agreement is known as?
A. price leadership
B. price concentration
C. collusion
D. game theory,
An industry that has a relatively small number of firms that dominate the market is called ?
A. a colluding industry
B. a merged industry
C. a concentrated industry
D. a natural monopoly