ECON 208 Chapter Notes - Chapter 9: Marginal Revenue, Perfect Competition, Demand Curve

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redwildebeest941

27 Nov 2017

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ECON 208 Full Course Notes

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The competitiveness of the market- the in uence that individual rms have on market prices. These rms that have exactly the same products are not going to compete against each other. Where you will see market competitiveness is in oligopoly but not in a perfect market. The less power an individual rm has to in uence the market price, the more competitive is that markets structure. Extreme form of competitive market: perfectly competitive market. Rms able to sell as much as they want at the prevailing price. Signi cance of market structure. the demand curve faced by an individual rms may be different from the demand curve for the industry as a whole. Market structure plays a central role in determining the ef ciency of the market. Customers know the product and each rms price. Each rm reaches its minimum lrac at a level of output that is small relative to the industry"s total output.

Related Questions

1. When a profit-maximizing firm produces, they will be producing at that output at which marginal cost = marginal revenue:

all of the time
some of the time
on rare occasions
none of the time

2. Economics Profit is:

the same as accounting profit
sales minus explicit costs and implicit costs
sales minus variable costs and fixed costs
opportunity cost only

3. A market structure with so many firms that no one firm has any influence over price, and firms produce an identical product is called:

monopoly
oligopoly
perfect competition
monopolistic competition

4. Which of the following is NOT a characteristic of a perfectly competitive market?

identical products
perfect mobility
perfect knowledge
price maker

5. The demand curve in a perfectly competitive market is perfectly elastic.

true
false

emeraldwombat313

1. A perfectly elastic demand function

Select one:

a. is characteristic of an individual firm operating in a perfectly competitive market.

b. shows that a consumer is willing to pay any amount for the product.

c. shows that the individual firm can increase sales by lowering the price of output.

d. has a marginal revenue that is always decreasing.

2. Your local farmer has many competitors and exists in a market structure known as perfect competition. This means that price is determined outside of the individual farmer's ability to charge a price higher than the going market for a bushel of wheat, hence the farmer is

Select one:

a. a price maker and can therefore charge different customers different prices.

b. a price taker and cannot affect the market price of wheat.

c. always able to price produce above the competition and earn a larger profit.

d. never able to determine any prices he charges for anything, such as soybeans

3. All of the following are true regarding perfectly competitive price determination EXCEPT

Select one:

a. the individual firm takes the market price as given.

b. the individual firm is known as a market price maker.

c. the individual firm's marginal revenue curve is horizontal at the market price.

d. the market price is determined by the interactions among all buyers (households) and firms.

redhornet79

You have been hired as a consultant by your local mayor to look at the various market structures. Your role is to provide analysis and answers to these important questions that will help the mayor understand the structures of many of the businesses in his city: Describe each market structure discussed in the course (perfect competition, monopolistic competition, oligopoly, and monopoly) and discuss two of the market characteristics of each market structure. Identify one real-life example of a market structure in your local city and relate your example to each of the characteristics of the market. Describe how high entry barriers into a market will influence the long-run profitability of the firms. Explain the competitive pressures that are present in markets with high barriers to entry. Explain the price elasticity of demand in each market structure and its effect on the pricing of its products in each market. Describe how the role of the government affects each market structure's ability to price its products. Discuss the effect of international trade on each market structure.

grayfox355

ECON 208 Chapter Notes - Chapter 9: Marginal Revenue, Perfect Competition, Demand Curve

ECON 208 Full Course Notes

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