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10 Cards in this Set
- Front
- Back
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Which of the following characteristics is associated with perfectly competitive markets?
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a. Homogenous products
b. High barriers to entry c. Firms are price makers d. Small number of sellers |
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Which two of the following are not true regarding a firm operating under perfect competition?
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a. Marginal Revenue = Price
b. Profits are maximised where MR = MC c. The firm's demand curve is horizontal which means it is perfectly inelastic d. In order to sell more output, price must be lowered |
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Which of the following is true with regard to long run equilibrium in perfectly competitive markets?
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a. Profits will be maximised
b. Excessive profits can be achieved c. There is no incentive for firms to minimise costs of production d. Profits will be minimised |
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Which of the following market structures is most likely to achieve allocative efficiency in the long run?
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a. Monopoly
b. Perfect competition c. Monopolistic competition d. Oligopoly |
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Oligopoly is a market structure characterised by which of the following:
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a. A large number of small firms
b. Certainty regarding likely behaviour of rival firms c. Homogenous products d. A high degree of uncertainty regarding behaviour of rival firms |
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Which of the following is not true with regard to characteristics of a monopoly?
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a. It is the sole supplier of a particular product
b. The product has no close substitutes c. Entry to the industry is protected by high barriers to entry d. Perfect knowledge |
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Which of the following would not be an example of a barrier to entry?
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a. Economies of scale
b. Ownership or control of resources c. Low initial set up costs d. Patents or copyrights |
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A legal monopoly is defined as one where:
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a. A firm enjoys a market share of 75% of the market
b. A firm enjoys a market share of 25% of the market c. When a single firm is the most efficient structure for the production of a particular good or service d. A firm is the sole supplier of 100% of the market |
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A monopolist will produce at a quantity where:
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a. P = MC
b. P = MR c. MC = MR d. AC is minimised |
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The reason for the kinked demand curve is that:
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a. Oligopolists will expect a rival to react to a price reduction by reducing the price of their products
b. Oligopolists will expect a rival to react to a price increase by increasing the price of their products c. Oligopolists will expect a rival to react to a reduction by leaving their selling price unchanged d. Oligopolists will expect a rival to react to a price reduction by increasing the price of their products |
