ECON 1P91 Lecture Notes - Lecture 10: Demand Curve, Anacin, Product Differentiation

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periwinklehornet321

2 Dec 2016

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Controls price long run, retains economic profit. Some control over price long run, no economic profits. Only producer of that version of good. Anacin, tommy jeans: differentiated but not necessarily different. Each firm supplies a small part of total industry output. Each firm supplies small part of total industry output. (cid:374)o o(cid:374)e fir(cid:373) i(cid:374)flue(cid:374)ces other fir(cid:373)s" price a(cid:374) output. Downward sloping demand curve due to product differentiation not as steeply sloped as a monopolist excess capacity. (profit) max by setting price an output where mr = mc. No barriers to entry long run, no economic profit: p = atc, plr = lrac. P = atc in long run or p = lrac. Firm produces output below the point where mc = minatc. P > minatc because demand is downward sloping from product differentiation (goods not perfect substitute) Variety and innovation are valued by consumers need to assess the trade off.

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

1. A monopoly market structure is characterized by

a. large number of firms, standardized products, easy entry and exit.

b. large number of firms, differentiated products, easy entry and exit.

C. small number of firms, standardized or differentiated products, difficult entry.

d. one firm, a unique product without close substitutes, and impossible entry.

e. one firm, differentiated product, impossible entry.

2. Which of the following is not a characteristic of monopolistic competition?

a. Differentiated products

b. A downward-sloping demand curve for individual firms

c. Firms that are price makers

d. Impeded entry into the industry

e. A large number of firms

3. One factor that distinguishes oligopoly from other market structures is

a. the ease of entry into the market.

b. the interdependence of firms.

c. the slope of the demand curve.

d. the degree of product differentiation.

e. the amount of advertising expenditures.

lavenderbat941

If an industry has no barriers to entry, no product promotion strategy, a standardized product type, and a very large number of firms operating within it, the industry can be said to have

Select one:

a. a monopoly market structure.

b. perfect competition.

c. differentiated market.

d. monopolistic competition.

e. an oligopoly market structure.

The long-run average-cost curve

Select one:

a. connects the minimum points of all the short-run average-total-cost curves.

b. connects the maximum points of all the short-run average-total-cost curves.

c. connects minimum points on the short-run total-cost curves.

d. indicates the most efficient scale of operation for a given level of output.

e. is the most efficient scale of operation.

ECON 1P91 Lecture Notes - Lecture 10: Demand Curve, Anacin, Product Differentiation

ECON 1P91 Full Course Notes

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