ECN 104 Chapter Notes - Chapter 9: Monopolistic Competition, Marginal Revenue, Average Variable Cost

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ochrelizard803

7 Sep 2017

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Ecn chapter 9: perfect competition in the short run. C onnect revenues and cos ts to s ee how a bus ines s decides what price to charge and how much output to produce. A firm"s decis ions concerning price and production depend greatly on the market s tructure of the indus try in which it operates . At one extreme is an indus try in which a s ingle producer dominates the market; at the other extreme are indus tries in which thous ands of firms each produce a minute fraction of market s upply. B etween thes e extremes are ma ny other types of indus tries . Market structure: the characteristics of an industry that define the likely behaviour and performance of its firms. T he operation of a competitive economy provides a s tandard, or norm, for evaluating the efficienc y of the real-world economy.

Related Questions

Match the following.

constant-cost industry	A market structure in which a large number of firms sell a homogenous product or service with no restrictions on entry or exit and each firm is a price-taker.
increasing-cost industry	The demand facing a price-taking firm.
long-run equilibrium	A firm produces zero output but must still pay its fixed costs.
marginal revenue product	Price below which a firm shuts down in the short run.
perfect competition	All firms produce where price equals long-run marginal cost, and economic profits are zero.
perfectly elastic demand	Industry in which input prices rise as all firms in the industry expand output.
shut down	Industry in which input prices remain constant as all firms in the industry expand output.
the shut-down price	The additional revenue earned by hiring one more unit of a variable input.

viridianhare336

1. A monopoly market structure is characterized by

a. large number of firms, standardized products, easy entry and exit.

b. large number of firms, differentiated products, easy entry and exit.

C. small number of firms, standardized or differentiated products, difficult entry.

d. one firm, a unique product without close substitutes, and impossible entry.

e. one firm, differentiated product, impossible entry.

2. Which of the following is not a characteristic of monopolistic competition?

a. Differentiated products

b. A downward-sloping demand curve for individual firms

c. Firms that are price makers

d. Impeded entry into the industry

e. A large number of firms

3. One factor that distinguishes oligopoly from other market structures is

a. the ease of entry into the market.

b. the interdependence of firms.

c. the slope of the demand curve.

d. the degree of product differentiation.

e. the amount of advertising expenditures.

lavenderbat941

1)Which of the following is true about the Sherman Act?

A.It prohibited price discrimination.

B. It prohibited price-fixing and collusion.

C. It prohibited mergers if it led to weakened competition.

D. It made engaging in predatory activities illegal.

E. It encouraged firms to take advantage of the patent system.

2)
Which of the following is true of price discrimination?

A. Customers need to differ in their willingness to pay for price discrimination to occur.

B. Customers need to have a unit elastic demand curve for price discrimination to occur.

C. Price discriminators profit by charging a uniform price to all customers.

D. Price discriminators lack the incentive to reduce their average total cost of production.

E. Customers can easily resell a good to other customers if there exists price discrimination in the market for the good.

3) Which of the following types of firms do not practice price discrimination?

A. Airlines

B. Movie theaters

C. Soft drink companies

D. Colleges

E. Amusement parks

4) Oligopoly, like perfect competition, is a market structure in which firms can easily enter and leave the industry.

a. True
b. False

Monopolistic competition is characterized by:

A. A large number of firms selling differentiated products.

B. A perfectly elastic demand curve.

C. High barriers to entry.

D. large number of firms selling identical products.

E. A small number of firms selling differentiated products.

6) Which of the following is not a source of product differentiation?

A. Prestige considerations in products

B. Differences in the cost of production of products

C. Physical differences in products

D. Differences in the services provided by firms

E. Differences in the location of sales outlets

7) The restaurants in San Francisco can probably be categorized as examples of firms

A. operating in an oligopolistic market.

B. operating in a monopolistically competitive market

C. operating in a perfectly competitive market

D. forming a cartel.

E. Operating in a monopolistic market

teallouse322

ECN 104 Chapter Notes - Chapter 9: Monopolistic Competition, Marginal Revenue, Average Variable Cost

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