Question 1) List the characteristics of monopolistic competition.
Question 2) Explain how product differentiation occurs in similar products.
Question 3) Determine the profit maximizing price and output level for a monopolistic competitor in the short run when given cost and demand data.
Question 4) Explain why a monopolistic competitor will realize only normal profit in the long run.
Question 5) Identify the reasons for excess capacity in monopolistic competition.
Question 6) Explain how product differentiation may offset these inefficiencies.
Question 7) Describe the characteristics of an oligopolistic industry.
Question 8) Differentiate between homogeneous and differentiated oligopolies.
Question 9) Identify and explain the most important causes of oligopoly.
Question 10) Describe and compare the concentration ratio and the Herfindahl index as ways to measure market dominance in an industry.
Question 11) Use a profit-payoffs matrix (game theory) to explain the mutual interdependence of two rival firms and why oligopolists might tempt to cheat on a collusive agreement.
Question 12) Identify three possible models of oligopolistic price-output behavior.
Question 13) Use the kinked demand curve theory to explain why prices tend to be inflexible.
Question 14) Explain the major advantages of collusion for oligopolistic producers.
Question 15) List the obstacles to collusion behavior.
Question 16) Explain price leadership as a form of tacit collusion.
Question 17) Explain why oligopolies may prefer nonprice competition over price competition.
Question 18) List the positive and negative effects of advertising.
Question 19) Explain why some economists assert that oligopoly is less desirable than pure monopoly.
Question 20) Explain the three ways that the power of olipogolists may be diminished.