AGR 110 Chapter Notes - Chapter 11: Market Power, Demand Curve, Oligopoly

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lemonrhinoceros946

17 Apr 2017

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The ability to affect the price of output. A firm with market power faces a downward-sloping demand curve. The organization of an industry, typically defined by the number of firms in an industry. A market structure characterized by a single seller. A firm characterized by a market power, or the ability to influence the output price. A price-making firm faces a downward-sloping demand curve. A firm so small relative to the industry that the price of output is fixed and given, no matter how large of how small the quantity of output it sells. A situation where a single firm has large fixed costs, making it the most efficient (lowest cost) for production to be considered in a single firm. A market structure defined by: many sellers, a product with close, but differentiated, substitutes, some freedom of entry and exit, some availability of knowledge and information.

Related Questions

A.

In long-run equilibrium, every firm in a perfectly competitive industry earns an economic profit.

B.

Pure competition exists in a market when firms are price makers as opposed to price takers.

C.

A natural monopoly results when the profit-maximizing output level occurs at a point where long-run average costs are decreasing.

D.

Downward-sloping industry demand curves characterize monopoly markets; horizontal demand curves characterize perfectly competitive markets.

E.

A decrease in the price elasticity of demand would follow an increase in monopoly power.

amethysthippopotamus941

QUESTION 22

For a perfectly competitive firm, profit maximization (or loss minimization) occurs at the level of output at which

	a.	MR = MC.
	b.	MR = AVC.
	c.	P = ATC.
	d.	MR = ATC.

4 points

QUESTION 23

If MR > MC, then

	a.	profits are being maximized.
	b.	the firm is producing too much of the good to be maximizing profits.
	c.	the firm can increase its profits (or minimize its losses) by increasing output.
	d.	the firm must be incurring losses.

4 points

QUESTION 24

If firms are earning zero economic profits, they must be producing at an output level at which

	a.	price minus marginal cost.
	b.	total revenue equals total costs, in other words, normal profits.
	c.	price equals average variable cost.
	d.	marginal revenue equals marginal cost.
	e.	none of the above

4 points

QUESTION 25

In the theory of perfect competition,

	a.	the market demand curve is horizontal.
	b.	the single firm faces a horizontal demand curve.
	c.	the single firm faces a downward-sloping demand curve.
	d.	the market demand curve is downward sloping.
	e.	b and d

azureshark954

1. Which of the following is a difference between a perfectly competitive market and a monopoly?

A. There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly.

B. The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.

C. The sellers in a perfectly competitive market are price-makers, while a seller in a monopoly market is a price-taker.

D. The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue.

2. Which of the following firms is likely to have the highest market power?

A. An oligopoly with homogeneous products

B. A monopoly

C. A monopolistic competitor

D. A perfectly competitive firm

graygrasshopper945

AGR 110 Chapter Notes - Chapter 11: Market Power, Demand Curve, Oligopoly

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