EC120 Chapter Notes - Chapter 16: Strange Town, Economic Surplus, Externality

54 views5 pages

plumbeaver231

17 Oct 2012

School

Department

Course

Professor

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

carminegrasshopper545 and 38337 others unlocked

EC120 Full Course Notes

Verified Note

30 documents

Document Summary

A buyer in the book market has thousands of competing products from which to choose. One type of imperfectly competitive market is an oligopoly, which is a market with only a few sellers, each offering a product that is similar or identical to the produces offered by other sellers. A second type of imperfectly competitive market is called monopolistic competition. This describes a market structure in which there are many firms selling products that are similar but not identical. To be more precise, monopolistic competition describes a market with the following attributes: There is a long list of markets with these attributes: cds, movies, computer games, restaurants, etc. A monopolistically competitive market departs from the perfectly competitive ideal because each of the sellers offers a somewhat different product. There is no way to determine when products are differentiated and when they are identical. Many sellers: there are many firms competing for the same group of customers.

Related Questions

there are three imperfectly competitive market structures under which, the vast majority of business operations fall. The market structures are monopolistic competition, oligopoly, and pure monopoly.describe each structure in terms of the types of products or services produced, number of firms competing in each structure (few or many), barriers to entry into the structure (high, moderate, or low), and how much control do firms in each structure have over price. Offer examples of companies classified in each.

taupemouse353

1. Which of the following is a characteristic of pure monopoly?

A. close substitute products

B. barriers to entry

C. the absence of market power

D. "price taking"

2. An example of a monopoly would be

A. one of many U.S. wheat farmers

B. one of the few U.S. automakers

C. AT&T cell phone service

D. the local water company

3. In which market structure do firms exist in very large numbers, each firm produces an identical product, and there is freedom of entry and exit?

A. monopoly

B. oligopoly

C. only perfect competition

D. only monopolistic competition

E. both perfect competition and monopolistic competition

4. Which of the following is the best example of a perfectly competitive market?

A. farming

B. diamonds

C. athletic shoes

D. soft drinks

E. electricity distribution

crimsonalligator541

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

EC120 Chapter Notes - Chapter 16: Strange Town, Economic Surplus, Externality

EC120 Full Course Notes

Document Summary

Get access

Related Documents

EC120 Lecture Notes - Lecture 2: Via Rail, Natural Monopoly, Oligopoly

EC120 Lecture Notes - Lecture 20: Oligopoly, Profit Maximization, Marginal Cost

EC120 Chapter Notes - Chapter 16: Economic Surplus, Externality, Profit Maximization

Related Questions