Which describes an oligopoly?
a. one firm producing 95% of the output
b. two to four firms producing 70% - 80% of the output
c. eight to ten firms producing 60% - 70% of the output
d. ten or more firms producing 90% of the output
Ans: b. two to four firms producing 70% - 80% of the output
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Refer to Mexico and Japan. Can trade in food and cloth benefit Mexico and Japan?
a. It cannot benefit Japan, because Japan cannot successfully compete with Mexico.
b. It cannot benefit Mexico, because Japan is too small to be an effective trading partner.
c. It can benefit both only if the people in Mexico and Japan have different tastes.
d. It can benefit both if Mexico specializes in food and Japan specializes in cloth.
Which of the following is NOT an entitlement?
A) federal government salaries B) Medicare C) Medicaid D) Social Security
If the economy is producing at potential GDP
A) the short-run aggregate supply curve must be vertical. B) inflation in the economy is at its natural rate. C) the Phillips curve must be positively sloped. D) unemployment is at its natural rate.
A monopoly:
A. is a price taker. B. faces competition from other firms producing close substitutes. C. restricts its output. D. sets a low price by controlling the level of output.