MGEC62H3 Chapter Notes - Chapter 6: Monopoly, Monopolistic Competition, Imperfect Competition

80 views2 pages

lavenderdonkey6

18 Oct 2011

School

UTSC

Department

Economics for Management Studies

Course

MGEC62H3

Professor

Garth Frazer

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

Document Summary

Chapter 6 economies of scale, imperfect competition, and international trade. That is, because they want to buy this firm"s particular product, the firm"s customers will not rush to buy others" products because of a price difference. As a result, the monopolistic competition model assumes that even though each firm is in reality facing competition from other firms, it behaves as if it were a monopolist hence the model"s name. Economies of scale and comparative advantage the exchange of one good (x) for the same good is called intraindustry trade the exchange of x for another good (y) is called interindustry trade four points about this pattern of trade: Interindustry (x for y) trade reflects comparative advantage. The pattern of interindustry trade is that home, the capital- abundant country, is a net exporter of capital-intensive x and a net importer of labour-intensive y. Intraindustry trade (x for x) does not reflect comparative advantage.

Related Questions

What are the internal economies of scale?

rosehamster774

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

12. Economies of scale and scope are important for trade because A. they amplify and maintain cross-country divergences in the historical evolution of economic capital B. they reduce barriers to entry C. they lead to perfect competition in production D. all of the above

MGEC62H3 Chapter Notes - Chapter 6: Monopoly, Monopolistic Competition, Imperfect Competition

Document Summary

Get access

Related Documents

EC239 Chapter Notes - Chapter 7: Reverse Engineering, Perfect Competition, International Trade

ECO230Y1 Final: study notes ch6-8

ECON 223- Midterm Exam Guide - Comprehensive Notes for the exam ( 34 pages long!)

Related Questions