#1
What is a characteristic feature of an oligopoly market?
A few dominant sellers
ExplanationLimited number of major players in the market.
#2
Which market structure is characterized by a few interdependent firms dominating the market?
Oligopoly
ExplanationMarket controlled by a small number of powerful firms.
#3
Which of the following best describes the term 'barriers to entry' in an oligopoly?
Factors that prevent new competitors from easily entering an industry
ExplanationObstacles hindering new firms from joining the market.
#4
Which of the following market structures is characterized by strategic behavior in setting prices?
Oligopoly
ExplanationMarket controlled by a small number of firms who strategically set prices.
#5
Which of the following is a characteristic of a duopoly, a specific type of oligopoly?
Only two firms dominate the market
ExplanationMarket controlled by two major players.
#6
In an oligopoly, firms may engage in which of the following to avoid price wars?
Price fixing
ExplanationAgreement among firms to set prices together.
#7
Which of the following is a common method used by oligopolies to prevent the entry of new competitors?
Creating barriers to entry
ExplanationStrategies to hinder new competitors from entering the market.
#8
How do oligopolies typically influence product prices?
By colluding to set prices
ExplanationWorking together to control pricing.
#9
What is a potential drawback of collusion among firms in an oligopoly?
Higher consumer prices
ExplanationNegative impact on consumer costs due to lack of competition.
#10
Which of the following is a real-world example of an oligopolistic market?
Global oil industry
ExplanationIndustry dominated by a few major oil companies.
#11
What is the main factor that differentiates oligopoly from monopolistic competition?
Number of firms in the market
ExplanationFew dominant players in oligopoly versus many competitors in monopolistic competition.
#12
What is a key feature of products in an oligopolistic market?
Products can be differentiated
ExplanationProducts can vary in features, branding, etc.
#13
What is the 'kinked demand curve' hypothesis often associated with in oligopoly?
Firm's demand for its own product
ExplanationPredicting a firm's reaction to price changes by competitors.
#14
Which game theory concept is frequently applied to understand strategic interactions among oligopolistic firms?
Nash equilibrium
ExplanationStable outcome where no player has incentive to change strategy unilaterally.
#15
What is the term used to describe a situation where firms in an oligopoly match each other's price changes?
Price rigidity
ExplanationTendency of firms to maintain existing prices.
#16
In an oligopoly, how do firms typically respond to a competitor's price cut?
Immediately match the price cut
ExplanationQuickly adjust prices to stay competitive.
#17
What is the term used to describe a situation where an oligopoly breaks down into a more competitive market structure?
Market integration
ExplanationShift towards a market with more players and competition.