Chapter 8 Test Terms

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Taxi and limousine service in New York City is relatively expensive due to the ease of entry into that market

False

The amount of competition a seller faces depends on how unique its product is and what the price is

False

In a perfectly competitive market, buyers and sellers have relevant information about prices, product quality, and sources of supply

True

In some towns, cable television providers in trash collectors are monopolists

True

It is important to a monopolist to search out the best price through trial and error

True

Movie theaters practice price discrimination

True

Owning all of the scarce resource can allow affirmed operate as a monopoly without legal protection

True

Perfectly competitive market firms produce the quantity of output which marginal revenue equals marginal cost

True

Price discrimination is not usually considered illegal by government if no injury occurs to competition or if it is necessary to compete in the market

True

Profit attracts new firms into the perfectly competitive market

True

Some Firms exist as monopolists because they have an average total cost solo that other firms can't compete with them

True

The US Supreme Court decides some anti-trust cases

True

When it comes to determining price, sellers in a perfectly competitive market A. Have no control B. Considerable control C. Limited control D. Varied control, depending on circumstances

A. No control

In what market structure are sellers "price takers"? A. Perfectly competitive B. Monopolistic C. Monopolistic competitive D. Oligopolistic

A. Perfectly competitive

Firms protected from competition by public franchises, parents, or copyrights are called A. Natural monopolies B. Government monopolies C. Resource monopolies D. Antitrust monopolies

B. Government monopolies

Antitrust laws are designed to A. Decrease competition B. Increase competition C. Protect copyrights and patent laws D. None of the above

B. Increase completion

When a single producer has complete control over one kind of good or service, the market structure is called A. Perfectly competitive B. Monopolistic C. Monopolistic competitive D. Oligopolistic

B. Monopolistic

A major difference between perfectly competitive markets and monopolistic competitive markets is that with monopolistic competition A. There are fewer sellers B. Products are differentiated, not identical C. Barriers to entry exist D. Forming cartels is a possibility

B. Products are differentiated, not identical

In a perfectly competitive market, products must be A. Unique B. Slightly differentiated C. Identical D. Both B and C

C. Identical

Sellers in a perfectly competitive market can charge the equilibrium price and sometimes slightly higher than equilibrium price for their product

False

I'm monopolistic competitive markets, firms spend considerable amounts of money on A. Advertising B. Packaging C. Differentiating their product D. All of the above

D. All of the above

Maximizing profit is the goal of A. Perfectly competitive markets B. Monopolistic markets C. Monopolistic competitive markets D. All of the above

D. All of the above

Which of the following industries practice price discrimination? A. Movie theaters B. Pharmacies C. Restaurants D. All of the above

D. All of the above

In the soft drink industry, if two companies account for about 80 percent of sales, then the market must be considered A. Perfectly competitive B. Monopolistic C. Monopolistic competitive D. Oligopolistic

D. Oligopolistic

When only a few producers and their products dominate industry, the market structure is called A. Perfectly competitive B. Monopolistic C. Monopolistic competitive D. Oligopolistic

D. Oligopolistic

A major advantage enjoyed by monopolist is their ability to charge any amount for their unique good or service

False

A natural monopoly exists with affirms product is made with resources provided by nature

False

A patent is granted for a new product or process for five years

False

A pharmaceutical company may have a copyright on a medicine, which protects its Company from competitors for a period of time

False

A successful, profitable oligopolistic firm will attract other sellers into the market

False

Airlines in cars are examples of industries in the monopolistic competitive market

False

Any increase in the price of a monopolistic competitive firms product will result in a total loss of sales since all customers will purchase a substitute product from the competition

False

Easy entry into the market is a characteristic that all market structures share

False

Government regulation serves as an incentive to the natural monopolist to hold down its costs

False

If a perfectly competitive market doesn't satisfy all four characteristics 100%, that it isn't a perfectly competitive market

False

It's the competition between buyers and sellers that keep downward pressure on prices

False

Monopolistic firms rely on legal barriers place by government to keep rival firms from entering the market

False

Sellers in a market can price discriminate

False

The organization of petroleum exporting countries is a cartel that operates in the United States

False

The phrase tying contracts describes the merger of two firms into one

False

There is easier entry into a monopolistic market

False

When highly profitable businesses are heavily taxed, the government generates new revenue for itself without affecting consumers

False

All four types of market structures Have similarities, including the fact that each of them has buyers and sellers

True

Antitrust laws are meant to control monopoly power and promote competition

True

Barriers to entry limit potential competition

True

Both monopolistic competitive and oligopolistic market share the characteristic of slightly differentiated products

True

Firms in a monopolistic competitive market or price searchers

True

A monopolistic market consists of one seller that sells a product that has no close substitutes

True

A public franchise is a RIGHT granted to affirm by the government that permits The Firm to be the exclusive provider of a good or service

True

A trust is formed when firms agree to act in a coordinated way to reduce the competition among them

True

Advertising has the potential to persuade the bank public that one firms product is more than slightly differentiated from the competitors product

True

The federal trade commission act was designed to prohibit aggressive price can you ask but the actors not precisely defined what unfair methods of competition consist of

True

The main points of the Sherman act prohibit actions that result in restraint of trade and hold the conspiring persons guilty of a misdemeanor

True

The stock market is an example of a perfectly competitive market

True

The term colluding refers to making secret agreement that reduce competition

True

The way a product is packaged could cause it to qualify as a differentiated products in a monopolistic competitive market

True

There is a strong monetary incentive for firms that enter into cartel agreements to break them

True

Two characteristics of a monopolistic competitive market includes selling slightly differentiated products and ease of entry into the market

True


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