ECON 1000 CHAPTER 6 Que &Answ Fall
solution
Competitive firms cannot individually affect market price because:
A.) There is an infinite demand for their goods.
B.) The market demand curve is flat or horizontal.
C.) Their individual production is insignificant relative to the production of the industry.
D.) The government exercises control over the market power of competitive firms. Answer - C
Which of the following is an example of a monopoly?
A.) One large firm supplies the entire product to the market
B.) One firm supplies 60 percent of the product to the market and there are two other rival firms
C.) Many firms supply the same product essentially, but each has significant brand loyalty
D.) A few large firms supply the entire product to the market Answer - A
Market power:
A.) Is the same for all market structures.
B.) Means that a firm is a price taker, not a price setter.
C.) Is the ability to alter the market price of a good or service.
D.) Only exists for a monopoly. Answer - C
If a firm can change market prices by altering its output then it:
A.) Has market power.
B.) Is a price taker.
, C.) Faces a horizontal demand curve.
D.) Is a competitive firm. Answer - A
Which list has market structures in the correct order from the most to the least market power?
A.) Perfect competition, oligopoly, monopolistic competition, monopoly
B.) Monopoly, monopolistic competition, oligopoly, perfect competition
C.) Monopoly, oligopoly, monopolistic competition, perfect competition
D.) Oligopoly, perfect competition, monopolistic competition, monopoly Answer - C
An industry in which a few large firms supply most or all of a product is known as:
A.) Perfect competition.
B.) A monopoly.
C.) Monopolistic competition.
D.) An oligopoly. Answer - D
An industry in which many firms produce similar products but each firm has significant brand loyalty is
known as:
A.) Perfect competition.
B.) A monopoly.
C.) Monopolistic competition.
D.) An oligopoly. Answer - C
Which of the following is characteristic of perfectly competitive markets?
A.) Differentiated products
B.) A large number of firms
solution
Competitive firms cannot individually affect market price because:
A.) There is an infinite demand for their goods.
B.) The market demand curve is flat or horizontal.
C.) Their individual production is insignificant relative to the production of the industry.
D.) The government exercises control over the market power of competitive firms. Answer - C
Which of the following is an example of a monopoly?
A.) One large firm supplies the entire product to the market
B.) One firm supplies 60 percent of the product to the market and there are two other rival firms
C.) Many firms supply the same product essentially, but each has significant brand loyalty
D.) A few large firms supply the entire product to the market Answer - A
Market power:
A.) Is the same for all market structures.
B.) Means that a firm is a price taker, not a price setter.
C.) Is the ability to alter the market price of a good or service.
D.) Only exists for a monopoly. Answer - C
If a firm can change market prices by altering its output then it:
A.) Has market power.
B.) Is a price taker.
, C.) Faces a horizontal demand curve.
D.) Is a competitive firm. Answer - A
Which list has market structures in the correct order from the most to the least market power?
A.) Perfect competition, oligopoly, monopolistic competition, monopoly
B.) Monopoly, monopolistic competition, oligopoly, perfect competition
C.) Monopoly, oligopoly, monopolistic competition, perfect competition
D.) Oligopoly, perfect competition, monopolistic competition, monopoly Answer - C
An industry in which a few large firms supply most or all of a product is known as:
A.) Perfect competition.
B.) A monopoly.
C.) Monopolistic competition.
D.) An oligopoly. Answer - D
An industry in which many firms produce similar products but each firm has significant brand loyalty is
known as:
A.) Perfect competition.
B.) A monopoly.
C.) Monopolistic competition.
D.) An oligopoly. Answer - C
Which of the following is characteristic of perfectly competitive markets?
A.) Differentiated products
B.) A large number of firms
