7. The Herfindahl index (HHI) can measure more or less concentration among the top four firms in an industry while the 4-Firm concentration ratio cannot.

• a. True
• b. False

8. Economies of large scale is a source of oligopoly power.

• a. True
• b. False

9. An industry with significant barriers to entry discourages an oligopoly market structure.

• a. True
• b. False

10. Which of these generally tends, by definition, to be the most contestable market structure?

• a. Monopoly
• b. Oligopoly
• c. Monopolistic competition
• d. Perfect competition

11. In the market structure of oligopoly, a rivalry among firms does NOT play an important role in market outcomes.

• a. True
• b. False

12. What do we assume about pricing by the firms in an oligopolistic cartel?

• a. Firms will jointly set price to increase profits.
• b. Firms set price and output independently.
• c. Firms will use price as a weapon to hurt other firms.
• d. Firms will price independently even if they cooperate to set rules of competition among members.

13. When examining profit-maximizing pricing and output in the theory of an oligopolistic cartel, the text chooses as a basis for comparison which industry structure?

• a. An industry with tens of thousands of perfectly competitive firms who could not hope to organize as a cartel
• b. An industry monopolized by one firm
• c. A government regulated oligopoly
• d. An industry in which 100 firms first act as competitors and then actively collude

14. Unlike the constraints facing a monopolist, a constraint on the decisions of a firm in an oligopoly market structure include the reactions of rivals to the firm's decisions.

• a. True
• b. False