Oligopoly MCQs

Option A: Prisoner’s Dilemma

Option B: Monopoly Cell

Option C: Jailhouses Sentences

Option D: Jury Box

Correct Answer: A. Prisoner’s Dilemma ✔

Option A: Rs 85

Option B: Rs 75

Option C: Rs 80

Option D: Rs 60

Correct Answer: Rs 75 ✔

Option A: has a legitimate purpose of stopping discount retailers from free riding on the services provided by full services retailers?

Option B: is price fixing and, therefore is prohibited by law

Option C: is price fixing and therefore, is prohibited by law and enhances the market power of the producer

Option D: enhances the market power of the producer

Correct Answer: has a legitimate purpose of stopping discount retailers from free riding on the services provided by full services retailers? ✔

Option A: output in the market tends to fall because each firm must cut back on production

Option B: the price in the market moves further from marginal cost

Option C: collusion is more likely to occur because a larger number of firms can place pressure on any firm that defects

Option D: The price in the market moves closer to marginal cost

Correct Answer: The price in the market moves closer to marginal cost ✔

Option A: more than the level produced by a monopoly and less than the level produced by a competitive market

Option B: less than the level produced by a monopoly and more than the level produced by a competitive market

Option C: less than the level produce by either monopoly or a competitive market

Option D: more than the level produced by either monopoly or a competitive market

Correct Answer: more than the level produced by a monopoly and less than the level produced by a competitive market ✔

Option A: Should produce more units

Option B: has maximized profits.

Option C: is in a Nash equilibrium

Option D: Should produce fewer units

Correct Answer: Should produce more units ✔

Option A: monopolistic competition

Option B: monopoly

Option C: perfect competition

Option D: oligopoly

Correct Answer: monopolistic competition ✔

Option A: Firms compete against each other

Option B: Price wars are common

Option C: Firms use price to win market share from competitors

Option D: Firms collude

Correct Answer: Firms collude ✔

Option A: There is a kink in the marginal cost curve

Option B: Demand is price inelastic

Option C: Demand is price elastic

Option D: non-price competition is likely

Correct Answer: non-price competition is likely ✔

Option A: Firms cooperate

Option B: Firms act as part of cartel

Option C: Firms are competitive

Option D: Firms are not profit maximisers

Correct Answer: Firms are competitive ✔

Option A: Limit

Option B: Factor

Option C: Quota

Option D: Quotient

Correct Answer: Quota ✔

Option A: antimonopoly laws

Option B: all of these answers

Option C: anti-collusion laws

Option D: pro-competition laws

Correct Answer: antitrust laws ✔

Option A: Rs 60

Option B: Rs 90

Option C: Rs 85

Option D: Rs 75

Correct Answer: Rs 85 ✔

Option A: all of these answers

Option B: if additional firms enter of the oligopoly

Option C: because antitrust laws (also known as competition laws) make collusion illegal

Option D: because, in the case of oligopoly self-interest is in conflict with cooperation.

Correct Answer: all of these answers ✔

Option A: Nash equilibrium

Option B: dominant strategy.

Option C: cartel

Option D: collusion solution

Correct Answer: Nash equilibrium ✔

Option A: more than the price charged by either monopoly or a competitive market

Option B: less than the price charged by either monopoly or a competitive market

Option C: more than the price charged by a monopoly and less then the price charged by a competitive market

Option D: less than the price charged by a monopoly and more than the price charged by a competitive market

Correct Answer: less than the price charged by a monopoly and more than the price charged by a competitive market ✔

Option A: monopoly

Option B: a competitive market

Option C: monopolistic competition

Option D: a collusion solution

Correct Answer: a competitive market ✔

Option A: the same as if it were served by competitive firms.

Option B: efficient because cooperation improves efficiency

Option C: the same as if it were served by a monopoly.

Option D: known as a Nash equilibrium

Correct Answer: the same as if it were served by a monopoly. ✔

Option A: monopolistically competitive

Option B: a monopoly

Option C: an oligopoly

Option D: competitive

Correct Answer: an oligopoly ✔

Option A: Each individual firm profit maximizes

Option B: There may be an incentive to cheat

Option C: The industry as a whole is loss making

Option D: There is no need to police agreements

Correct Answer: There may be an incentive to cheat ✔

Option A: Invest heavily in branding

Option B: Act independently of other firms

Option C: Try to differentiate its products

Option D: Try to be a price maker

Correct Answer: Try to be a price maker ✔

Option A: Firms are assumed to act independently

Option B: Firms are assumed to cooperate with each other

Option C: Firms collude as part of cartel

Option D: Firms consider the actions of others before deciding what to do

Correct Answer: Firms consider the actions of others before deciding what to do ✔

Option A: An increase in price by the firm is not followed by others

Option B: An increase in price by the firm is followed by others

Option C: A decrease in price by the firm is followed by others

Option D: Firms collude to fix the price

Correct Answer: An increase in price by the firm is not followed by others ✔

Option A: monopolistic competition

Option B: Competitively monopolistic

Option C: Duopoly

Option D: Oligopoly

Correct Answer: Oligopoly ✔