Economics MCQs

A. Firms cooperate
B. Firms act as part of cartel
C. Firms are competitive
D. Firms are not profit maximisers

A. There is a kink in the marginal cost curve
B. Demand is price inelastic
C. Demand is price elastic
D. Non-price competition is likely

A. Firms compete against each other
B. Price wars are common
C. Firms use price to win market share from competitors
D. Firms collude

A. More than the price charged by either monopoly or a competitive market
B. Less than the price charged by either monopoly or a competitive market
C. More than the price charged by a monopoly and less then the price charged by a competitive market
D. Less than the price charged by a monopoly and more than the price charged by a competitive market

A. Nash equilibrium
B. Dominant strategy.
C. Cartel
D. Collusion solution

A. All of these answers
B. If additional firms enter of the oligopoly
C. Because antitrust laws (also known as competition laws) make collusion illegal
D. Because, in the case of oligopoly self-interest is in conflict with cooperation.

A. Invest heavily in branding
B. Act independently of other firms
C. Try to differentiate its products
D. Try to be a price maker

A. Each individual firm profit maximizes
B. There may be an incentive to cheat
C. The industry as a whole is loss making
D. There is no need to police agreements

A. Monopolistically competitive
B. A monopoly
C. An oligopoly
D. Competitive

A. The same as if it were served by competitive firms.
B. Efficient because cooperation improves efficiency
C. The same as if it were served by a monopoly.
D. Known as a nash equilibrium