ECS2601 Unit 1 – 5/ Intermediate Microeconomics Final
Exam| With complete solu"on| RATED A+ | NEW 2026
Oligopoly is a market structure in which
A. firms are price takers.
B. there exist many firms, each producing a product that is a close, but imperfect, subs tute for
the
products of other firms.
C. there are only a few sellers.
D. there is only one seller.
C. there are only a few sellers
Which of the following markets can most accurately be described as monopolis cally
compe ve?
A. Toothpaste
B. Milk
C. Electricity
D. Apples
A. Toothpaste
The model of monopolis c compe on differs from the model of perfect compe on in which
of the following assump ons?
A. Free entry and exit
B. Product homogeneity
C. Large number of firms
D. Perfect informa on
B. product homogeneity
Excess capacity for a firm in an oligopoly situa on
A. cannot contribute to long run profit for a firm.
B. encourages compe tors to enter the market and build at op mal capacity.
C. is a deterrent to entry in the market by poten al compe tors.
D. will be temporary if the planning was done right.
C. is a deterrent to entry in the market by poten al compe tors
,In the Cournot model,
A. each firm takes the quan es produced by its rivals as given.
B. each firm takes the prices charged by its rivals as given.
C. one firm plays a leadership role and its rivals merely follow.
D. prices are higher and quan es are slightly less than we would see if the firms colluded.
A. Each firm takes the quan es produced by its rivals as given
In the Bertrand model,
A. each firm takes the quan es produced by its rivals as given.
B. each firm takes the prices charged by its rivals as given.
C. one firm plays a leadership role and its rivals merely follow.
D. prices are higher and quan es are slightly less than we would see if the firms colluded to
achieve the monopoly outcome.
B. Each firm takes the prices charged by its rivals as given
In the Stackelberg model,
A. each firm takes the quan es produced by its rivals as given.
B. each firm takes the prices charged by its rivals as given.
C. one firm plays a leadership role and its rivals merely react to the leader's quan ty.
D. prices are higher and quan es are slightly less than we would see if the firms colluded to
achieve the monopoly outcome.
C. one firm plays the leadership role and its rivals merely react to the leaders quan ty
The oligopoly model in which each firm assumes that rivals will con nue to produce at their
current output levels is called the:
A. Cournot model
B. Bertrand model
C. Stackelberg model
D. Chamberlin model
A. Cournot Model
The basic idea of the theory of contestable markets is that when the cost of entry and exit is
very low, the threat of entry can be sufficient to produce an alloca on similar to the one we see
under
A. monopoly.
B. monopolis c compe on.
C. perfect compe on.
D. oligopoly.
,C. Perfect compe on
When marginal cost is constant and zero, the interdependence between Cournot duopolists
causes
A. price to be 1/3 higher and quan ty to be 1/3 lower than the corresponding values in the
monopoly case.
B. price to be 1/3 lower and quan ty to be 1/3 higher than the corresponding values in the
monopoly case.
C. prices and quan es to be the same as they would be in the monopoly case.
D. prices and quan es to be the same as they would be in the perfectly compe ve case.
B. price to be 1/3 lower and quan ty to be 1/3 higher than the corresponding values in the
Cournot duopolists face a market demand curve given by P = 90 - Q where Q is total market
demand. Each firm can produce output at a constant marginal cost of 30 per unit. The
equilibrium price and quan ty for the total market will be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
C. Q = 40, P = 50.
Bertrand duopolists face a market demand curve given by P = 90 - Q where Q is total market
demand. Each firm can produce output at a constant marginal cost of 30 per unit. The
equilibrium price and quan ty for the total market will be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
B. Q = 60, P = 30.
Stackelberg Leader-Follower duopolists face a market demand curve given by P = 90 - Q where
Q is total market demand. Each firm can produce output at a constant marginal cost of 30 per
unit. The equilibrium price and quan ty for the total market will be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
D. Q = 45, P = 45.
, Cournot duopolists face a market demand curve given by P = 90 - Q where Q is total market
demand. Each firm can produce output at a constant marginal cost of 30 per unit. If the
duopolists behave as a shared monopoly, the equilibrium price and total quan ty of output will
be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
A. Q = 30, P = 60.
Prices in the Bertrand model are
A. the same as prices under a shared monopoly.
B. slightly higher than prices would be under a shared monopoly.
C. the same as prices would be in the perfectly compe ve case.
D. slightly higher than prices would be in the perfectly compe ve case.
C. the same as prices would be in the perfectly compe ve case.
The strategy for the Bertrand model is
A. to sell a marginally higher quan ty of goods than the rival.
B. to sell at a marginally lower price than the rival but not below marginal cost.
C. collusion.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
B. to sell at a marginally lower price than the rival but not below marginal cost.
The strategy for the Stackelberg Leader is
A. to sell a marginally higher quan ty of goods than the rival.
B. to sell at a marginally lower price than the rival.
C. collusion.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
The strategy for the shared monopoly is
A. to sell a marginally higher quan ty of goods than the rival.
B. to sell at a marginally lower price than the rival.
C. collusion.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
C. Collusion
Exam| With complete solu"on| RATED A+ | NEW 2026
Oligopoly is a market structure in which
A. firms are price takers.
B. there exist many firms, each producing a product that is a close, but imperfect, subs tute for
the
products of other firms.
C. there are only a few sellers.
D. there is only one seller.
C. there are only a few sellers
Which of the following markets can most accurately be described as monopolis cally
compe ve?
A. Toothpaste
B. Milk
C. Electricity
D. Apples
A. Toothpaste
The model of monopolis c compe on differs from the model of perfect compe on in which
of the following assump ons?
A. Free entry and exit
B. Product homogeneity
C. Large number of firms
D. Perfect informa on
B. product homogeneity
Excess capacity for a firm in an oligopoly situa on
A. cannot contribute to long run profit for a firm.
B. encourages compe tors to enter the market and build at op mal capacity.
C. is a deterrent to entry in the market by poten al compe tors.
D. will be temporary if the planning was done right.
C. is a deterrent to entry in the market by poten al compe tors
,In the Cournot model,
A. each firm takes the quan es produced by its rivals as given.
B. each firm takes the prices charged by its rivals as given.
C. one firm plays a leadership role and its rivals merely follow.
D. prices are higher and quan es are slightly less than we would see if the firms colluded.
A. Each firm takes the quan es produced by its rivals as given
In the Bertrand model,
A. each firm takes the quan es produced by its rivals as given.
B. each firm takes the prices charged by its rivals as given.
C. one firm plays a leadership role and its rivals merely follow.
D. prices are higher and quan es are slightly less than we would see if the firms colluded to
achieve the monopoly outcome.
B. Each firm takes the prices charged by its rivals as given
In the Stackelberg model,
A. each firm takes the quan es produced by its rivals as given.
B. each firm takes the prices charged by its rivals as given.
C. one firm plays a leadership role and its rivals merely react to the leader's quan ty.
D. prices are higher and quan es are slightly less than we would see if the firms colluded to
achieve the monopoly outcome.
C. one firm plays the leadership role and its rivals merely react to the leaders quan ty
The oligopoly model in which each firm assumes that rivals will con nue to produce at their
current output levels is called the:
A. Cournot model
B. Bertrand model
C. Stackelberg model
D. Chamberlin model
A. Cournot Model
The basic idea of the theory of contestable markets is that when the cost of entry and exit is
very low, the threat of entry can be sufficient to produce an alloca on similar to the one we see
under
A. monopoly.
B. monopolis c compe on.
C. perfect compe on.
D. oligopoly.
,C. Perfect compe on
When marginal cost is constant and zero, the interdependence between Cournot duopolists
causes
A. price to be 1/3 higher and quan ty to be 1/3 lower than the corresponding values in the
monopoly case.
B. price to be 1/3 lower and quan ty to be 1/3 higher than the corresponding values in the
monopoly case.
C. prices and quan es to be the same as they would be in the monopoly case.
D. prices and quan es to be the same as they would be in the perfectly compe ve case.
B. price to be 1/3 lower and quan ty to be 1/3 higher than the corresponding values in the
Cournot duopolists face a market demand curve given by P = 90 - Q where Q is total market
demand. Each firm can produce output at a constant marginal cost of 30 per unit. The
equilibrium price and quan ty for the total market will be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
C. Q = 40, P = 50.
Bertrand duopolists face a market demand curve given by P = 90 - Q where Q is total market
demand. Each firm can produce output at a constant marginal cost of 30 per unit. The
equilibrium price and quan ty for the total market will be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
B. Q = 60, P = 30.
Stackelberg Leader-Follower duopolists face a market demand curve given by P = 90 - Q where
Q is total market demand. Each firm can produce output at a constant marginal cost of 30 per
unit. The equilibrium price and quan ty for the total market will be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
D. Q = 45, P = 45.
, Cournot duopolists face a market demand curve given by P = 90 - Q where Q is total market
demand. Each firm can produce output at a constant marginal cost of 30 per unit. If the
duopolists behave as a shared monopoly, the equilibrium price and total quan ty of output will
be
A. Q = 30, P = 60.
B. Q = 60, P = 30.
C. Q = 40, P = 50.
D. Q = 45, P = 45.
A. Q = 30, P = 60.
Prices in the Bertrand model are
A. the same as prices under a shared monopoly.
B. slightly higher than prices would be under a shared monopoly.
C. the same as prices would be in the perfectly compe ve case.
D. slightly higher than prices would be in the perfectly compe ve case.
C. the same as prices would be in the perfectly compe ve case.
The strategy for the Bertrand model is
A. to sell a marginally higher quan ty of goods than the rival.
B. to sell at a marginally lower price than the rival but not below marginal cost.
C. collusion.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
B. to sell at a marginally lower price than the rival but not below marginal cost.
The strategy for the Stackelberg Leader is
A. to sell a marginally higher quan ty of goods than the rival.
B. to sell at a marginally lower price than the rival.
C. collusion.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
The strategy for the shared monopoly is
A. to sell a marginally higher quan ty of goods than the rival.
B. to sell at a marginally lower price than the rival.
C. collusion.
D. to take account of the effect of its own behavior on the rival firm's quan ty choice.
C. Collusion
