Chapter 6 Flashcards
With respect to the monopolist’s demand curve, it can be said that:
it will be identical to the market demand curve
A monopolist’s demand curve:
lies above its marginal revenue curve
A monopolist’s demand curve:
is less elastic than a perfectly competitive business’s demand curve
The monopolist’s demand curve is:
identical to the market demand curve
A monopolist’s demand curve is:
downward-sloping
A monopolistically competitive business has a demand curve that is:
elastic
The monopolistically competitive seller’s demand curve will tend to become more elastic the:
larger the number of possible substitutes
Monopolistic competition and oligopoly are alike in that:
non-price competition is common to both
The mutual interdependence that characterizes an oligopoly arises because:
a small number of businesses make up the market
Because of mutual interdependence, oligopolists must:
take into account the potential reactions of competitors to actions they may take
The kinked demand curve of an oligopoly assumes a business’s rivals will:
ignore a price increase but match a price cut
If a kink exists in an oligopolist’s demand curve:
an abrupt change in price elasticity occurs
A kinked demand curve:
is typical of rival oligopolists
If Toyota establishes prices for new cars each year, and General Motors and Ford model their prices on General Motors’ prices, this is known as:
price leadership
