The forces that determine the cost of production are largely independent of the forces that shape demand.
a. True
b. False
QUESTION 2According to William Shepherd's examination of competitive trends in the U.S. economy, a tight oligopoly
a. is a single firm that controls the entire market and can block entry
b. is an industry in which the top four firms supply more than 60 percent of the market, have stable market shares, and cooperate with each other
c. is an industry in which the top four firms supply more than 60 percent of the market, have unstable market shares, and do not cooperate with each other
d. is an industry in which a single firm has over half the market share and no close rival
e. is an industry in which a single firm has over one-third of the entire market, the market share is stable, and the firm cooperates with other firms in the industry
QUESTION 3It is possible for a firm to enjoy a short-run producer surplus, while at the same time suffering a short-run economic loss
a. True
b. False
QUESTION 4Monopolistic competitors are protected by barriers to entry.
a. True
b. False
QUESTION 5According to William Shepherd's examination of competitive trends in the U.S. economy, a dominant firm
a. is a pure monopoly
b. is a firm with over half the market share and no close rival
c. is one of four firms that together supply more than 60 percent of the market
d. is a single firm that controls the entire market and can block entry
e. is one of four firms that work together to block entry into the market
QUESTION 6Producer surplus measures the difference between total revenues and fixed cost
a. True
b. False
QUESTION 7Product differentiation helps determine the slope of the demand curve facing a firm in monopolistic competition.
a. True
b. False
QUESTION 8The research of William Shepherd suggests that since World War II, the three main reasons for increased competition in U.S. industries are international trade, deregulation, and antitrust activity.
a. True
b. False
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