Use Your Basic Knowledge and Your Understanding of Market Structures

question 169

Multiple Choice

Use your basic knowledge and your understanding of market structures to answer this question. Which of the following companies most closely approximates a differentiated oligopolist in a highly concentrated industry?

• A) Subway Sandwiches
• B) Pittsburgh Plate Glass
• C) Ford Motor Company
• D) Kaiser Aluminum

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Definitions:

Contribution Margin

Contribution Margin is the selling price per unit minus the variable cost per unit, indicating how much of a product's sales contribute towards fixed expenses and profit.

Net Income

The profit of a company after all expenses and taxes have been subtracted from total revenue; a key indicator of financial health.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much contributes to covering fixed costs.

Indirect Expenses

Costs that are not directly tied to a specific product, service, or department and need to be allocated, such as utilities or rent.