ECO100Y5 Chapter 9: Chapter 9 (Competitive Markets)

74 views5 pages

pearrabbit974

30 Nov 2017

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

sophiapham192 and 37296 others unlocked

ECO100Y5 Full Course Notes

Verified Note

53 documents

Document Summary

Perfectly co(cid:373)petitive markets, role of profits, allocative/tech(cid:374)ical efficie(cid:374)cy. Homogenous products (identical) compete with each other solely based on price. Differentiated products (similar, but not identical) can compete on different traits of the same product, which allows price differences to exist. Any impediment that makes it difficult for a new firm to enter & compete in a market. Free entry markets have no serious impediments, other than cost. Barriers of entry can include high setup costs (isps, airlines, oil) or legal barriers (can"t sell a patented good). For a firm in perfect competition, the marginal revenue is equal to the price received! The average amount received per unit. (cid:1807)(cid:1814)(cid:1812) (cid:1805)(cid:1822)(cid:1805)(cid:1814)(cid:1821)(cid:1805)= otal evenue. # of goods old= q (cid:1822)(cid:1805)(cid:1807)(cid:1805) (cid:1805)(cid:1822)(cid:1805)(cid:1814)(cid:1821)(cid:1805)= otal evenue. Total revenue is the total amount received as firms sell their products. (cid:1815)(cid:1820)(cid:1812) (cid:1805)(cid:1822)(cid:1805)(cid:1814)(cid:1821)(cid:1805)=(cid:4666)# of goods old(cid:4667)x(cid:4666)price ecieved per good(cid:4667)=p x q. The change in total revenue as a firm sells one more unit of a good.

Related Questions

1) A natural monopoly exists when:

a. A few firms collude to make one large firm

b. Firms enter the industry as a result of profit incentives

c. Economies of scale provide large cost advantages to having one firm produce the industry's output

d. Firms naturally maximize regardless of market structure

2) A(n) ____ is a single firm with ___, whereas a(n) ___ implies an industry with ____ firm(s) and ____ .

a. Monopoly; barriers to entry; oligopoly; few; no barriers to entry

b. Oligopoly; no barriers to entry; monopoly; many; easy entry and exit

c. Monopoly; barriers to entry; monopolistic competition; many; easy entry and exit

d. Monopolistic competitor; barriers to entry; monopoly; one; barriers to entry

3) In monopolistic competition:

a. Each firm produces a product identical to that of every other firm in the industry

b. Firms are aware of their strategic interdependence

c. Firms earn large economic profits in the long run

d. Firms earn zero economic profits in the long run

4) A monopolistically competitive industry, such as corn snack chips, and a perfectly competitive industry, like wheat farming, are alike in that:

a. There are many firms in each industry

b. Firms in both types of industries produce similar but not identical products

c. Barriers to entry in both industries are large

d. Firms in both types of industries produce identical products

byzantiumfish483

âCreative destruction,â a term most closely associated with Joseph Schumpeter, an economist associated with the Austrian School of Economics, emphasizes the roles innovation and entrepreneurship as factors which spur economic growth and serve to reallocate resources from poorly-performing firms to more promising ventures. The balanced scorecard approach relies on the theory of creative destruction as the engine which continuously drives the business enterprise to create value for customers, shareholders, and employees.

Generally speaking, the âlearning and innovationâ perspective in the Kaplan & Norton (1992) balanced scorecard aligns with actors in Marketplace which promote creative destruction. Hereâs an example of creative destruction: Apple continues to make its best-selling products obsolete before potential competitors can seriously challenge and erode Appleâs market advantage in digital music, smart phones, and digital application technologies.

After reviewing the types of investments companies can make in Marketplace, what types of activities can teams do in Marketplace to continue to learn and innovate in ways to create and maintain competitive advantages over other teams?

With two-part pricing

Select one:

A. consumers are required to buy two units of a good.

B. the consumer is limited in the number of units that can be purchased.

C. the average price paid varies with the number of units purchased.

D. the consumer puts down a deposit and then pays the rest when she picks up the goods purchased.

Which of the following sellers is most able to perfectly price discriminate?

Select one:

A. the post office

B. a clothing store

C. a grocery supermarket

D. a college or university

3.Consumers are better off with pricing in the following order: 1)________; 2)________; 3)________.

Select one:

A. competitive market; single-price monopoly; perfect price discrimination

B. single-price monopoly; competitive market; perfect price discrimination

C. competitive market; perfect price discrimination; single-price monopoly

D. Unable to determine.

4.Group price discrimination has ________ consumer surplus than under ________.

Select one:

A. more; an elastic demand curve

B. less; single-price monopoly

C. less; perfect competition

D. more; perfect competition

6. If a firm is to capture all consumer surplus with two-part pricing when customers are different

Select one:

A. it must be able to charge different access fees.

B. it must set unit price below marginal cost.

C. it must set unit price above marginal cost.

D. it cannot charge different prices for access fees.

7. All firms can increase profits using price discrimination.

Select one:

A. true, because firms can sell different versions of a product that is just right for an individual consumer

B. true, because market demand curves are downward sloping

C. false, because consumers aren't forced to buy a producer's products

D. false, because some firms are in competitive markets

For a perfect-price-discriminating monopoly, the marginal revenue curve

Select one:

A. varies for each consumer.

B. is the demand curve.

C. is the same as the monopolist's marginal revenue curve.

D. lies below the demand curve.

A good example of perfect price discrimination is

9. Select one:

A. buying a concert ticket on the street corner.

B. selling concert tickets to individuals on the street corner.

C. buying concert tickets at the ticket window.

D. selling concert tickets at the ticket window.

10. Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 5 - (1/2)q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $1. The profit-maximizing two-part tariff yields total revenue of

Select one:

A. $32.

B. $40.

C. $24.

D. $16.

amaranthmanatee1

ECO100Y5 Chapter 9: Chapter 9 (Competitive Markets)

ECO100Y5 Full Course Notes

Document Summary

Get access

Related textbook solutions

Principles of Economics

Principles of Macroeconomics

Principles of Microeconomics

Related Documents

ECO100Y5 Lecture Notes - Lecture 7: Perfect Competition, Market Power, Demand Curve

ECO100Y5 Chapter Notes - Chapter 10: Electric Power Transmission, Marginal Revenue, Profit Maximization

ECO100Y5 Chapter Notes - Chapter 10: Average Variable Cost, Marginal Revenue, Profit Maximization

Related Questions