Hello,

Need help with the following review questions. I figured out the rest of them so far but these are confusing me. If explanations can be provided that's even better! If not, the answers will suffice.

1. Which of these factors contributes to the existence of monopoly power?

1. A continuously decreasing long-run average cost curve.
2. Possession of a patent.
3. Control of essential inputs in the production process.
4. A pure cost or quality advantage.
5. All of the answers above are correct.

2. The basic objective of a cartel is to

1. Maximize profit for the largest, most powerful members.
2. Negotiate the division of the cartel's profit.
3. Produce the highest output level possible.
4. Maximize the cartel's collective profit.
5. Price discriminate.

3. Oligopoly differs from other forms of market structure (monopoly and perfect competition) because

1. Firms frequently engage in collusion.
2. Firms are protected by high barriers to entry.
3. Firms' decisions have direct effects on their rivals' profits.
4. Firms' price decisions are extremely limited.
5. All of the answers above are correct.

The term "loose oligopoly" refers to an industry with

1. A four-firm industry concentration ratio of 90%.
2. A four-firm industry concentration ratio between 40% and 60%.
3. Significant price competition.
4. A four-firm industry concentration ratio between 60% and 80%.
5. A large number of differentiated sellers.

The dominant firm serving as the price leader in an oligopolistic industry will charge a price that

1. Is fair to all other oligopolists.
2. Is consistent with the MR = MC profit-maximizing criterion.
3. Maximizes total revenue for the firm.
4. Maximizes total profits for the industry as a whole.
5. Minimizes average cost.