Question

Although oligopolies face constraints like other markets, which of the following is one difference?

a.	It faces a vertical demand curve.	b.	It faces reactions of rival firms.
c.	It faces a horizontal demand curve.	d.	It faces a positively sloped demand curve.

The price leadership model does not assume which of the following?

a.	The price elasticity for the leader is greater than for the smaller firms.	b.	The smaller firms are allowed to maximize their profits.
c.	Rivals will know how to respond to price changes.	d.	The dominant firm maximizes its profits.

Oligopolistic interdependence refers to which of the following?

a.	The need to pay attention to their internal costs	b.	The need to pay attention to the actions of the government
c.	The need to pay attention to their inputs	d.	The need to pay close attention to the actions of rival firms

A cartel is not a group of firms that ____________.

a.	limit output	b.	jointly maximize profits
c.	act without collusion	d.	act as one

Answer 1

Answer 1 - option B

Reason - oligopolies face the reaction of rival firms

Answer 2 - option C

Reason - assumption of price leadership model does not include the assumption like "rival will know how to respond to change in price

Answer 3 - option D

Reason - oligopolistic independence means they have to keep an eye on the closest rival firms while making it on decisions

Answer 4 - option C

Reason - cartel is a group of firm that act together to maximise the profit by limiting the output hence act without collusion does not include in this defination