ECON-2006EG Study Guide - Quiz Guide: Invisible Hand, Decision Rule, Substitute Good

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ceruleanraccoon367

7 Mar 2021

School

Laurentian

Department

Economics / Science Èconomique

Course

ECON-2006EG

Professor

Byron Eastman

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Document Summary

Differentiated products refer to goods that are similar but are not perfect substitutes. Homogeneous products refer to goods that are identical, and so are perfect substitutes. A useful classification of market structures must therefore distinguish industries along two dimensions: The number of firms supplying a given product. Oligopoly is the market structure that applies when there are few firms competing. Monopolistic competition is the market structure that applies when there are many competing firms and products differentiated. There are no restrictions on entry, any number of firms can enter the industry at any time. Due to cost advantages associated with the economies of scale of oligopoly or other barriers to entry, entry and exit will not necessarily push the market to zero economic profits in the long run. Because of relatively few competitors, there is an important interaction between the few sellers that do occupy the market.

Related Questions

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

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

Homework help and study guide help, all multiple choice

A monopolist:

A) can sell as much as it wants at the chosen price because it is the only seller.

B) can increase the price only if it is willing to decrease the quantity sold.

C) can increase the price and the quantity sold at the same time.

D) is not restricted by the law of demand.

A monopolistically competitive firm:

A) produces where marginal revenue equals marginal cost and charges the price consumers are willing to pay as given by the demand curve.

B) produces where marginal cost equals average total cost and charges the price consumers are willing to pay as given by the demand curve.

C) chooses price and quantity based on where the marginal cost curve meets the demand curve.

D) chooses price and quantity based on where the average total cost curve meets the demand curve.

21) Oligopoly is A) like a monopoly because there are barriers to entry. B) like perfect competition because oligopoly firms all sell homogeneous goods. C) like monopolistic competition because oligopoly firms all sell differentiated goods D) like perfect competition because there are many firms in the industry
ECON 1102 (Microeconomics) Test 4 (043015)

In ________ market structure, a firm's output depends ________.

A) an oligopoly; only on its own marginal revenue and marginal cost curves

B) a monopolistically competitive; in part on its competitors' price and quantity decisions

C) an oligopoly; in part on its competitors' price and quantity decisions

D) a monopolistically competitive; only on its marginal revenue curve

ECON-2006EG Study Guide - Quiz Guide: Invisible Hand, Decision Rule, Substitute Good

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