Micro Final Exam
price taker.
A firm in a perfectly competitive industry is a
cannot influence the market price.
A firm is a price taker if
monopolist.
A firm that is the only seller of a good with no close substitutes is a(n)
the country music industry.
A good example of a monopolistic competitive industry is
the restaurant industry.
A good example of a monopolistic competitive industry is
a homogeneous market.
A market situation in which a large number of firms produce similar but not identical products is
monopolistic competition.
A market situation in which a large number of firms produce similar but not identical products is
perfect competition
A market structure in which the decisions of individual buyers and sellers have no effect on market price is
perfect competition.
A market structure in which the decisions of individual buyers and sellers have no effect on market price is
vertical merger.
A merger between firms in which one firm purchases an input from the other is called a
horizontal merger.
A merger between firms that are in the same industry is called a
a single supplier of a good for which there is no close substitute.
A monopolist is
a single supplier of a good or service for which there is no close substitute.
A monopolist is defined as
monopoly.
A single supplier of a good or service for which there is no close substitute is referred to as a(n)
lower the consumer's purchase price.
Advertising by monopolistically competitive firms can do all of the following EXCEPT
produce identical products.
All firms in a perfect competition industry
there are a large number of buyers and sellers with only a few being able to influence the market price.
All of the following are characteristics of a perfectly competitive industry EXCEPT
a few firms dominate the industry.
All of the following are characteristics of monopolistic competition EXCEPT
product differentiation.
All of the following are characteristics of perfect competition EXCEPT
the demand curve for its product is perfectly elastic.
All of the following are true about a monopolist EXCEPT
there are very few sellers and they recognize their strategic dependence on one another.
An oligopoly is a market situation in which
product differentiation.
In a monopolistically competitive market, the consumer receives the benefit of
the firm and the industry are the same thing.
In a monopoly
is the whole industry.
In a monopoly market structure, the firm (the monopolist) always
no buyer or seller can influence the market price.
In a perfectly competitive industry
price
In a perfectly competitive market, which of the following is the main factor that affects consumers' decisions on which firm to purchase a good from?
must consider the reaction of rival firms when making a pricing or output decision.
In an oligopolistic market, each firm
a reaction by other firms.
In oligopoly, any action by one firm to change price, output, or quality causes
barriers to market entry.
In order for a firm to receive monopoly profits, there must be
monopolistic competition
In which industry structure is advertising and sales promotion likely to be most important?
anticipate the reaction of rival firms.
Managers in oligopoly firms must
patents.
Monopolies and oligopolies both erect barriers to entry through the use of
relative ease of entry into the market.
Monopolistic competition is characterized by
no competitive producers of the same product.
Monopoly producers face
diseconomies of scale.
Oligopolies can result from any of the following EXCEPT
many buyers and sellers.
Perfect competition is characterized by
Advertising plays a key role.
Which of the following describes monopolistic competition?
product homogeneity
Which of the following does NOT help explain why oligopolies exist?
The market price of the product is too high.
Which of the following is NOT a barrier to entry that would allow a monopolist to keep potential competitors out of its market?
U.S. antitrust legislation
Which of the following is NOT a barrier to entry?
Economic profits must be positive in the short run.
Which of the following is NOT a characteristic of a perfectly competitive industry?
Sellers have better information about the product than consumers.
Which of the following is NOT a characteristic of a perfectly competitive industry?
It is difficult for a firm to enter or leave the market.
Which of the following is NOT a characteristic of a perfectly competitive market?
a large number of entry barriers
Which of the following is NOT a characteristic of monopolistic competition?
barriers to entry
Which of the following is NOT a characteristic of monopolistic competition?
marginal cost pricing in the long run
Which of the following is NOT a characteristic of monopolistic competition?
perfectly elastic demand curves
Which of the following is NOT a characteristic of oligopoly firms?
The firms in an industry produce goods that are different from each other.
Which of the following is NOT a characteristic of perfect competition?
marginal cost pricing.
Which of the following is NOT a common characteristic of oligopoly?
differentiated products
Which of the following is NOT a necessary condition for oligopoly?
one single producer
Which of the following is a characteristic of a monopoly market?
easy entry and exit
Which of the following is a characteristic of monopolistic competition?
strategic dependence
Which of the following is a characteristic of oligopoly?
easy entry and exit
Which of the following is a characteristic of perfect competition?
wireless service
Which of the following is most likely to be sold in an oligopoly market?
The monopolist produces only goods of highest quality.
Which of the following regarding a monopolist is INCORRECT?
Typically there are numerous very close substitutes for the product of a monopolist.
Which of the following statements is FALSE?
textbook publishers
Which one of the following industries is best classified as an oligopoly?
the firm produces a good similar to a good in another industry.
A firm can be the only firm in an industry and still not be a monopoly if
there are very close substitutes for the good.
A firm can be the sole supplier of a good and is still not a monopolist if
a firm cannot influence the market price.
Being a price taker essentially means
a price taker.
Each firm in a perfectly competitive industry is
is easy.
Entry into a monopolistic competitive industry
is relatively easy.
Entry into a monopolistically competitive industry
a horizontal merger.
If Verizon Wireless and T-mobile, another wireless service company, were to merge, this would represent
It can sell all the units it wants at the going market price.
If a firm is an oligopolist, which is NOT true?
maintain its current amount of advertising
In a monopolistically competitive market if the additional revenue generated from advertising equals the additional cost of advertising, the firm should
maintain its current amount of advertising.
In a monopolistically competitive market if the additional revenue generated from advertising equals the additional cost of advertising, the firm should
many firms producing similar but not identical products.
In a monopolistically competitive market there are
the additional revenue generated by one more dollar of advertising just equals the extra dollar cost of advertising.
In a monopolistically competitive market, a firm should advertise to the point at which
oligopoly
Strategic behavior and game theory are features of which market structure?
to differentiate the product and raise sales.
The main objective of advertising for a monopolistically competitive firm is
a monopoly
The market structure in which there is a single supplier of a good or service for which there is no close substitute is
concentration ratio.
The measurement of industry concentration which calculates the percentage of all sales contributed by a specific number of leading firms is called the
economies of scale.
The most common reason for the existence of oligopolies is
its production is too small to affect the market.
The perfectly competitive firm cannot influence the market price because
Edward Chamberlin and Joan Robinson.
The theory of monopolistic competition was developed in two separate models by
prevent the entry of other firms into the market for its product.
To be able to engage in profit-maximizing price searching, a monopoly firm must be able to
lose all of its customers.
Under perfect competition, a firm that sets its price slightly above the market price would
a vertical merger
When U.S. Steel, a steel producer, bought control of iron ore companies at the beginning of the 20th century, the company was initiating
firms can enter and leave the industry without serious impediments.
When considering perfect competition the absence of entry barriers implies that
no one buyer or seller has any influence on price.
When there are large numbers of buyers and sellers, then
economies of scale patents and copyrights control of resources
Which of the following are barriers to entry?
