Name_____________________ Per___ Date turned in________
Posted on internet Friday 03_16
Econ: Chapter: 7 Section: 3.1 Oligopoly Date Due: 03_20_Tuesday Page(s) 169
Thru 171 Biography: pg.165 Bill Gates; Data Bank: 534,535
Graphs Fig.6.1;6.2;6.3;6.4; Global Connection: pg.152 Skills for
Life:page:155 Fast Fact pg.159 Case study Regulating Cable Television
pg.177
Chapter 7 Section 3.1 Oligopoly
Objectives: after studying this section you will be able to:
A. Describe characteristics and give examples of monopolistic competition.
B. Explain how firms compete without lowering prices.
C. Understand how firms in a monopolistically competitive market set
output.
D. Describe characteristics and give examples of oligopoly
Main idea: Oligopoly, which is closer to monopoly, describes a market with
only a few large producers.
1. A market dominated by a few large, profitable firms is known as
an?____________
2. Oligopoly looks like an imperfect form of_______________.
3. What percentage, do the four largest firms of an industry, have to
produce in order for the industry to be an oligopoly?______________
4. How will firms in an oligopoly determine pricing, will they be lower or
higher than in a perfectly competitive market?____________ how much will
they produce? Who the produce more or less than firms in a perfectly
competitive market?_________________
5. Name at least two examples of oligopolies in the United
States.__________ _____________
6. Coca-Cola and Pepsi are oligopolies because of their brand-name
recognition, and worldwide extensive distribution networks. T
F
7. Expensive machinery, or large advertising campaigns can scare firms
away from a market. TF
8. Patents and government licenses do not create barriers to entry. T
F
9. It is difficult to compete in the airline industry because airplanes
are expensive to buy and maintain. TF
10. Oligopolists can get together to set prices and keep other firms from
entering the market. TF
11. Government regulations try to make oligopolistic firms act more like
competitive firms. TF
12. Market leaders can set prices and output for an entire industry and
not have to worry about price wars. TF
13. Whom do price wars benefit?___________ who they harm?_______
14. An agreement among members of the oligopoly
production levels is called?________________
to set prices and
15. An agreement among firms to sell at the same or very similar prices is
called____________
16. Collusion is legal in the United States. TF
17. What is one outcome of collusion?_____________
18. What temps businesses to make illegal agreements and unnecessary
risks?_________
19. Identical pricing may not be a result of collusion, name a possible
reason for identical pricing in an oligopolistic market._______________
20. An agreement by a formal organization of producers to coordinate
prices and production is called a_____________
21. Cartels are legal in the United States as well as in some other
countries. TF
22. A cartel can only survive if every member agrees to do what and no
more?__________
23. What is the temptation of every member of a cartel?______________
24. What happens to output if every member cheats?_____________ what
happens to prices if every member cheats______________
25. If you are not invited to join a cartel in an oligopolistic market how
will you price your product? Higher or lower than the other firms in the
market?
26. Cartels usually endure for many years. TF