1. What is a cartel? Are cartels legal in the United States?
  2. When does a monopoly exist? What is the pricing rule for a monopoly?
  3. Illustrate the dead weight loss of a monopoly.
  4. What is characterized by a natural monopoly?
  5. Why is breaking up a natural monopoly a bad idea?
  6. When the government regulates monopolies, where is price usually set?
  7. Illustrate X-inefficiency. Why is this concept important?
  8. What does dynamic efficiency measure? What is the implication of dynamic efficiency for monopolies?
  9. What are the defining characteristics of monopolistic competition?
  10. Explain the three key differences between oligopoly and monopolistic competition.
  11. Define the four-firm concentration ratio. Why are concentration ratios so important in studying market structure?
  12. Discuss the concepts of strategic interaction and mutual interdependence.
  13. What can we say about the difference between monopolistic competition and perfect competition?
  14. Discuss the relationship between product differentiation and nonprice competition.
  15. Identify four sources of product differentiation.
  16. From the economist’s point of view, product differentiation in general and advertising in particular have what two goals?
  17. For what two reasons is monopolistic competition sometimes called noncollusive oligopoly?
  18. What will profits be for monopolistic competition in the short and long run?
  19. Illustrate the short and long run implications of monopolistic competition for market performance.
  20. Some economists argue that monopolistic competition leads to both excessive advertising and needless brand proliferation. Why?

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