Question

35. What is the most special market characteristic of oligopoly different from the other market structures?

a. firms have market power

b. product differentiation

c. barriers to entry

d. interdependence of decision making

36. Which of the following is INCORRECT in the MS Excel operation for constructing a short-run production function with labor input (L)?

a.		The regression model should be a cubic function such as Q = AL3+BL2.
b.		The independent variables should be L3, L2 and L.
c.		We need to choose “Constant as zero” in regression operation.
d.		None of the above

Answer 1

1. The most special characteristic of oligopoly is interdependence of the various firms in the decision making because if a small number of sizeable firms constitute an industry and one of these firms starts advertising campaign on a big scale or designs a new model of the product which immediately captures the market, it will surely provoke countermoves on the part of rival firms in the industry.
2. In the MS Excel, the independent variables are L3, L2 and L is incorrect operation for constructing a short-run production function with labor input (L).