Chapter 8 Test Terms
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
