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