In oligopoly     a) the largest four firms are likely to have a small market share     b) the price is likely to equal marginal revenue     c) firms will continue to produce in the long run if price is less than average cost     d) firms may collude or compete depending on their assumptions about their customers

An industry comprising 40 firms, none of which has more than 3 percent of the total market for a differentiated product, is an example of Multiple Choice   monopolistic competition.   oligopoly.   pure monopoly.   pure competition.

Suppose that the market for computers is dominated by a single firm, like IBM, that is able to exert influence over prices and output. This situation violates the perfect competition assumption of*many buyers and sellers.identical or homogeneous goods.ease of entry and exit.no differentiation. City hotels and restaurants are illustrative of*pure competition.monopolistic competition.oligopoly.monopoly.This characteristic of oligopoly implies that there is interdependence among firms that leads to conflicting motives, that leads them to act and react on the price movements of one another.*lack of uniformitycompetitionno unique patter of pricing behaviorinterdependence The actions of a firm in a purely competitive industry have no effect on market price; therefore, the demand curve faced by the firm is*unknown.a downward-sloping curve.a horizontal line at the level of the market price.a firm’s total revenue curve. A competitor maximizes profit by producing the output that*equates price…

Price leadership represents a situation where oligopolistic firms Multiple Choice   reduce their reliance on nonprice competition.   form a cartel.   face a kinked demand curve.   tacitly collude.