KIIT University 2008 micro-economics - exam paper

D)

firms have no incentive to change their strategy unless a rival 1st modifications its strategy.
E)

the firm that modifications its strategy 1st wins.

24)

Many gas station/convenience stores sell virtually exactly the identical products and identical kind of gasoline. Which of the subsequent statements is TRUE?

24)

______
A)

These stores are not differentiated.
B)

The market for gasoline and convenience products is perfectly competitive.
C)

These stores are differentiated primarily by location.
D)

These stores are differentiated because they sell differentiated products.
E)

These stores are monopolists.


25)

If markets are contestable

25)

______
A)

the market will be perfectly competitive.
B)

there are significant barriers to entry.
C)

there will be many firms in the market.
D)

the government is likely to step in and regulate the market.
E)

prices are likely to be low, even in concentrated industries.

26)

Which of the subsequent is false? A firm in monopolistic competition

26)

______
A)

can raise price and still retain a few customers.
B)

has a demand curve that is more elastic than a monopolist's would be.
C)

faces a downward sloping demand curve.
D)

can sell more units at the prevailing market price if it desires.
E)

can decrease price in order to sell more units.

27)

Centralized cartels

27)

______
A)

attempt to produce the monopoly output level and to charge the monopoly price.
B)

lower the profits of individual firms but raise the total profits of the industry.
C)

often lead to lower prices than would be the case under non-cooperation.
D)

have a issue with firms producing too little output.
E)

often lead to higher output levels than would be the case under non-cooperation.

28)

If 1 firm's actions affect the profits of rival firms, then which model of market structure most likely applies?

Earning:   Approval pending.