1. If the HHI for the widget industry is 1,200, then the market structure is

a. impossible to determine

b. an oligopoly.

c. perfect competition.

d. monopolistic competition.

e. a monopoly.

2. Suppose there are 7 firms in the candy industry with the market shares shown below. What is the HHI for the industry?

a. 6400

b. 20

c. 2000

d. 1850

e. 100

3. When a monopolistically competitive firm's demand curve shifts leftward, what happens to its marginal revenue curve?

a. It shifts rightward.

b. It disappears.

c. It shifts leftward.

d. Nothing, the marginal revenue curve is unchanged.

e. None of the above is correct because the effect on the marginal revenue curve depends on whether the demand was initially elastic or inelastic.

4. In the long run, a firm in monopolistic competition

a. can earn either a normal profit or an economic profit.

b. has deficient capacity.

c. produces at a minimum average total cost.

d. earns zero economic profit.

e. produces a quantity where its demand curve is upward sloping.

5. Game theory is used to analyze the interactions among firms in ________.

a. oligopoly

b. monopoly

c. perfect competition

d. monopolistic competition

e. Both answers A and D are correct.

6. When oligopolies operate like firms in perfect competition, the firms produce at the point where the

a. marginal cost equals the average total cost.

b. price exceeds the marginal cost by the greatest amount.

c. marginal cost equals the price.

d. price is less than the marginal cost.

e. price exceeds the average total cost by the greatest amount.

7. If firms in an oligopolistic industry consistently cut their price to sell more output, what price and output will result?

a. the monopolistically competitive price and output

b. the competitive price and output

c. the monopoly price and output

d. a price lower than the competitive price and more output than the competitive amount

e. a price lower than the competitive price and less output than the competitive amount