QUESTION 1

1. A dominant strategy in an oligopoly game is a strategy that is best for a player _____.

A. as long as its competitor follows the same strategy

B. regardless of the strategy of the other player

C. as long as its competitor follows a different strategy

D. as long as no additional players are allowed to play

E. when both players cooperate

QUESTION 2

1. Which of the following is not true for monopolistically competitive firms in the long run?

A. Economic profit equals zero.

B. Price equals average total cost.

C. Average total cost is minimized.

D. Marginal revenue equals marginal cost.

E. Price exceeds marginal revenue.

QUESTION 3

1. A key feature of oligopoly is_____.

A. strategic interdependence

B. differentiated output

C. standardized output

D. no significant barriers to entry

E. None of these

QUESTION 4

1. Which of the following is an example of nonprice competition?

A. A firm advertises to gain new customers.

B. Economic profit attracts entry by new firms.

C. Economic loss causes exit of existing firms.

D. A firm produces additional units for which marginal revenue exceeds marginal cost.

E. A firm cuts back production in order to increase profit.

QUESTION 5

1. Monopolistic competitors may earn positive economic profit in the short run, but earn zero economic profit in the long run.

True

False