Test Questions without Answers
Chapter 14. Competition Theory II.
Imperfect Competition
Chapter 14– Question 1
For a monopolistic firm marginal revenue is
- equal to price
- below price
- above price
- unrelated to price
Enter your answer here
Chapter 14 – Question 2
Explain the prisoners' dilemma by using an example of a duopoly.
Enter your answer here
Chapter 14– Question 3
Name some barriers to entry.
Enter your answer here
Chapter 14– Question 4
What conditions must be fulfilled to enable price discrimination?
Enter your answer here
Chapter 14– Question 5
Explain which advantages cartels offer to their members.
Enter your answer here
Chapter 14– Question 6
Explain why there is an inherent incentive for cartel members to violate the cartel's agreements.
Enter your answer here
Chapter 14 –Question 7
A monopoly maximises profit by charging $10 per unit. The marginal cost of its product is therefore
- $10
- above $10
- below $10
Enter your answer here
Chapter 14– Question 8
Why does a monopolistic firm make no profits in the long run?
Enter your answer here
Chapter 14 – Question 9
Draw a diagram to illustrate the price formation of a monopolist.
Chapter 14– Question 10
What is the best strategy in the prisoners' dilemma? Explain your answer.
Enter your answer here
Chapter 14– Question 11
Which of the statements below is correct about monopolists and price-taking perfect competitors
- only the monopolist sets MR = MC
- only the price-taking perfect competitors sets MR = MC
- both do so
- neither of them does so
Enter your answer here
Chapter 14 –Question 12
Explain why a monopoly is not efficient.
Enter your answer here
Chapter 14– Question 13
If an industry is a single-price monopoly - i.e. a non-price-discriminating monopoly - consumer surplus is
- higher than consumer surplus with price discrimination
- lower than consumer surplus with price discrimination
- equals consumer surplus with price discrimination.
Enter your answer here
Chapter 14 – Question 14
Which of the Acts below forbids unfair methods of competition?
- Sherman
- Clayton
- Federal Trade Commission
- Hart et al.
Enter your answer here
Chapter 14– Question 15
Name two instances of unfair competition.
Enter your answer here
Chapter 14– Question 16
There are 10 firms in an industry. 5 have a market share of 15 percent each, the other five 5 a market share of 5 each.
1) What is the concentration ratio in the industry?
2) And what is its Herfindahl index?
Enter your answer here
Chapter 14– Question 17
A monopolist with perfect price discrimination is not inefficient. Explain why not.
Enter your answer here
Chapter 14– Question 18
On what conditions does contestability of an industry depend?
Enter your answer here
Chapter 14– Question 19
If a monopolist can sell 200 units a day at $10 each or 201 units a day at $9.90 each, what is the marginal revenue of the 201st unit?
Enter your answer here
Chapter 14– Question 20
Marginal revenue is below price whenever the demand curve slopes downwards. True or false? Explain your answer.
Enter your answer here
Chapter 14 –Question 21
Give some examples of price discrimination.
Enter your answer here
Print this page with your answers to compare them with mine.