SAMPLE THIRD EXAM
ECON 206
PART I. MULTIPLE CHOICE.
1. What is the most likely response by a rival when an oligopoly firm cuts its price
to increase sales?
a. Raise their prices.
b. Ignore the changes.
c. Cut their prices.
d. Reduce their costs.
2. The measure of market power found by adding the market shares of the largest
four firms is:
a. the concentration ratio.
b. the sales of the market.
c. the monopoly price index.
d. the barriers to entry.
3. A kinked demand curve indicates that rival oligopolists match all:
a. increases in advertising.
b. price increases.
c. advertising reductions.
d. price reductions.
