Deck 8: Different Market Forms

Question 1

Monopolists have a high market share. Market share measures:

A) The total sales of a business
B) The growth in sales of a business over a year
C) The sales of a business compared to the total market sales
D) The profits of the business compared to the total profits in the market

Answer 1

c

Question 2

In a perfectly competitive market there are many firms with a similar product as well as barriers to entry.

Answer 2

False

Question 3

A monopolist can earn abnormal profits in the short and long term due to barriers to entry.

Answer 3

True

Question 4

Types of barrier to entry do not include:

A) Structural
B) Systematic
C) Strategic
D) Statutory

Question 5

In a perfectly competitive market the marginal revenue for a firm equals the price.

Question 6

In a perfectly competitive market the demand for the industry slopes downward but the demand for a single firm's products is horizontal.

Question 7

In a perfectly competitive market the firm is a price maker.

Question 8

In a perfectly competitive market a profit maximising firm produces where marginal revenue equals total revenue.

Question 9

In a perfectly competitive market in the long run the firm makes abnormal profits

Question 10

In monopoly the marginal revenue is above the demand curve.

Question 11

In monopoly the demand curve is horizontal.

Question 12

Abnormal profits occur when the average revenue is greater than average costs.

Question 13

In perfect competition there are barriers to entry.

Question 14

In a monopoly a profit maximising firm produces where marginal revenue equals marginal cost.

Question 15

When a few firms dominate a market this is known as an _________.

Question 16

In monopolistic competition there are barriers to entry in the long run.

Question 17

In the kinked demand curve what is assumed?

A) That a price cut will not be followed by rivals.
B) A price increase will be followed by rivals.
C) Rivals cooperate when setting prices.
D) Increasing the price will not be followed by rivals.

Question 18

A cartel occurs when firms collude.

Question 19

Complete the sentence. In monopolistic competition…

A) There are many firms.
B) The products are all similar.
C) There are barriers to entry.
D) Firms produce where marginal revenue equals average revenue.

Question 20

Four firms have a combined market share of around 20% each. This market is called what?

A) An oligopoly.
B) A monopoly.
C) Perfectly competitive.
D) Monopolistically competitive.

Question 21

A maximin strategy in oligopoly assumes firms…

A) Maximise the best possible outcomes
B) Minimise the best possible outcomes
C) Minimise the worst possible outcomes
D) Maximise the worst outcomes

Question 22

Profit maximisation when price discriminating will occur when?

A) The marginal revenue is equal in all markets.
B) The marginal costs are equal in all markets.
C) The average revenue is equal in all markets.
D) The total revenue is equal in all markets.

Question 23

In monopolistic competition there are many producers and a horizontal demand curve.