1. Which of the following statements about oligopolies is not correct?

a. Oligopolistic firms always charge the monopoly price.

b. Oligopolistic firms are interdependent in a way that firms in perfect competition are not.

c. An oligopolistic market has only a few sellers.

d. The actions of any one seller can have a large impact on the profits of all other sellers.

2. Which is true of an oligopoly market that reaches Nash equilibrium?

a. The firms will not have behaved as profit maximizes.

b. A firm will have chosen its best strategy, given the strategies chosen by other firms in the market.

c. A firm will not take into account the strategies of competing firms.

d. The market price will be different for each firm.

3. In game theory, what is a dominant strategy?

a. the best strategy for a player to follow, regardless of the what strategies other players use

b. a strategy that makes every player better off

c. a strategy that must appear in every game

d. the best strategy for a player to follow only if other players are cooperative

4. Which of the following situations produces the largest profits for oligopolists?

a. The firms reach a Nash equilibrium.

b. The firms combine to produce the monopoly output level.

c. The firms set prices equal to marginal cost.

d. The firms produce a quantity of output that lies between the competitive outcome and the monopoly outcome.