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[James Stewart]

1. In a model of a dominant firm with a competitive fringe, the demand curve for the dominant firm:

A) is the market quantity demanded added to the quantity supplied by the competitive firms.
B)is the same as the deamnd curve faced by the competitive fringe firms.
C) is the difference between the market quantity demanded and the quantity supplied by the competitive firms.
D) is the same as the demand curve for the industry

2. An oligopoly firm with a kinked demand curve has its marginal cost curve shift up because an increase in labor costs. The firm will respond to this inceased marginal cost by:
A) increaseing the quantity it sells.
B) not charging price or quantity
C) increasing the price it charges
D) decreasing the quantity it sells