Question

4) The theory of oligopoly suggests that A) oligopoly may be the best of the feasible alternative market structures when major scale economies exist. B) entry into the industry is an important force preventing the exploitation of market power by existing firms. C) innovation is weak when there is no price competition D) game theory is interesting theory but not useful for real corporate managers. E) the tendency toward joint maximization of profits is greater for a large number of sellers than for a small number of sellers 5) Which of the following industries in Canada can best thought of as oligopolies? 1) breweries 2) women's clothing retailers 3) automobile manufacturers A) 1 only B) 2 only C) 3 only D) 1 and 3 only E) 1, 2, and 3 6) "Brand proliferation is an example of A) an economy of scale. B) predatory pricing C) an absolute cost advantage. D) a firm-created barrier to entry. E) collusive behaviour,

Answer 1

4.

A

When firms exhibit economy of scale, then it works as an entry barrier and there are few firms in the market. It is also called as oligopoly market structure.

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5.

D

It is the industry of brewing as well as automobile manufacturers, that require huge investments, and few players in the market. So, these industries exhibit the characteristics of oligopoly market structure.

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6.

D

It is the firm level creation of barrier to entry that takes place due to the brand proliferation.