Economists have long understood the idea that businesses _____________so that they can raise the prices that they charge and earn higher profits.

	actively compete with each other
	avoid competing with each other
	engage in free market activities
	maximize profit margins for social benefit

An oligopolist will not be impacted by the choices of other firms in the market, such as output, price, and advertising.

	True
	False

As a means to differentiate their product a monopolistically competitive firm may:

	Place a recyclable symbol on its packaging
	Increase its advertising
	Offer a money back guarantee
	All of the above

In some cases, barriers to entry may lead to a _______________: in other market conditions, they may limit competition to _________________.

	Pure monopoly; to a natural monopoly
	Pure monopoly; to a few oligopolistic firms
	Natural Monopoly; to a few oligopolistic firms
	Natural monopoly; to a few perfectly competitive firms

When a firm pursues a predatory pricing strategy, it does so

	to hire more staff to lower unemployment.
	to increase supply to benefit consumers.
	to maximize profits in the long run.
	to discourage short run competition.

The XYX Steel slashes prices drastically as an attempt to discourage short run competition, this is a strategy known as

	price fixing
	Predatory pricing
	Competition
	Collusion

Through the process of exit, monopolistically competitive firms remaining in the market

	are no longer earning losses as demand will increase due to firms exiting.
	are no longer earning zero economic profits.
	will each have positive economic earnings.
	will each have ongoing negative earnings.