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Consider the relationship between a kinked demand curve and the corresponding

Consider the relationship between a kinked demand curve and the corresponding 
                            marginal revenue curve. Below the point where the kinked demand curve has its
                            characteristic kink, the marginal revenue curve is

a.positively sloped

b.a horizontal line

c.a vertical line

d.discontinuous

e.nonexistent because of the kink

113.              Assume that an oligopolist faces a kinked demand curve. Suppose that the marginal cost
                            curve passes through the gap in the marginal revenue curve. Price and output will be
                            determined

a.drawing a line from the point where MC = P to both the vertical and horizontal axis,
the vertical indicating output, the horizontal indicating price

b.drawing a line from the point where MC = P to both the vertical and horizontal axis,
the vertical indicating price, the horizontal indicating output

c.at the kink

d.at ATC = MC which, too, passes through the gap

e.to be zero because the MC curve passes through the gap

114.              If an increase in production costs (say, an increase in the wage rate) results in an upward
                            shift in the MC curve, but the MC curve still passes through the MR gap created by the
                            kinked demand curve, then the oligopolist will respond to that increase in production
                            costs by

a.keeping price and output the same

b.raising price and decreasing output

c.lowering price and increasing output

d.raising price and raising output

e.lowering price and lowering output

115.              Price discrimination by an oligopolist is an attempt to

a.lower costs of production

b.increase efficiency

c.increase market share

d.create a uniform price in a market where multiple prices exist

e.turn consumer surplus into economic profit

116.              A cartel maximizes industry profit by

a.eliminating quotas

b.producing at the kink in its demand curve

c.producing where MR = MC

d.cutting production costs to become more efficient

e.producing more output than a monopoly would

117.              A concentration ratio is the ratio of

a.market share to the number of firms in an industry

b.total sales to the number of firms in an industry

c.large firms to small firms in an industry

d.total sales of the leading firms to total sales in the industry

e.total profits of the leading firms to total profits in the industry

118.              If an industry has 16 firms of equal size, and each produces and sells the same quantity of
                            output at the same price, what is the four-firm concentration ratio of this industry?

a.16 percent

b.18 percent

c.22 percent

d.25 percent

e.not enough information to determine

119.              Suppose there are 100 firms in an industry. If the leading firm has a 50 percent market
                            share, the second largest firm has a market share of half the leader’s, the third has a
                            market share of half the second’s, and the fourth largest has a market share of half the
                            third’s, what is the four-firm concentration ratio?

a.6.25 percent

b.100.00 percent

c.75.50 percent

d.93.75 percent

e.99.75 percent

120.              Suppose there are 100 firms in an industry. If the leading firm has a 60 percent market
                            share, the second largest firm has a market share of half the leader’s, the third has a
                            market share of half the second’s, and the fourth largest has a market share of half the
                            third’s, what is the four-firm concentration ratio?

a.75 percent

b.85 percent

c.95 percent

d.100 percent

e.impossible because their combined market shares exceed 100 percent

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