MGEA02H3 Chapter : Week 10 study guide

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lavenderdonkey6

1 Dec 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEA02H3

Professor

Gordon Cleveland

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MGEA02H3 Full Course Notes

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Chapter 11 imperfect competition and strategic behaviour notes. N theory of oligopoly is about industries in which there are small number of large firms, each with market power, that compete. N concentration ratio the fraction of total market sales (or some other measure of market activity) controlled by a specific number of the industry"s largest firms. N differentiated product a group of commodities that are similar enough to be called the same product but dissimilar enough that all of them do not have to be sold at the same price. N most firms in imperfectly competitive markets sell differentiated products; in such industries, the firm itself must choose which characteristics to give the products that it will sell. The assumptions of monopolistic competition: each firm produces one specific brand of the industry"s differentiated product. In this respect, firms in monopolistic competition are similar to firms in perfect competition: there is freedom of entry and exit in the industry.

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

Economists use the term imperfect competition to describe:

a. all industries which produce standardized products.
b. any industry in which there is no non-price competition.
c. a pure monopoly only.
d. those markets which are not purely competitive.

ochrealligator966

Economists use the term imperfect competition to describe:
A. all industries which produce standardized products.
B. any industry in which there is no nonprice competition.
C. a pure monopoly only.
D. those markets which are not purely competitive

pinkgrasshopper546

MGEA02H3 Chapter : Week 10 study guide

MGEA02H3 Full Course Notes

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