ECON 2102 Chapter 8 2025/2026 Exam
Questions and Answers | 100% Solved
if the average cost of production declines as the number of units produced
increases, then the production process exhibits ___ - 🧠ANSWER
✔✔economies of scale
price setter - 🧠ANSWER ✔✔a firm with at least some latitude to set its own
price. The competitive firm
> Ex. The holder of a copyright
price taker - 🧠ANSWER ✔✔a firm with no influence over the price of its
product
pure monopoly - 🧠ANSWER ✔✔the only supplier of a unique product with
no close substitutes
, > Ex. producer of Magic trading cards
monopolistic competition - 🧠ANSWER ✔✔an industry structure in which a
large number of firms produce slightly differentiated products that are
reasonably close substitutes for one another
> Ex. local gasoline retailing
> not perfect competition
monopolistically competitive firms can't expect to earn positive economic
profits in the long run because ___ - 🧠ANSWER ✔✔entry and exit of firms
is similar to perfect competition, since entry and exit from the market
ensures the invisible hand is in effect since there isn't a complete monopoly
an issue monopolisticially competitive firms face is - 🧠ANSWER ✔✔how to
differentiate their products from those of existing rivals.
Questions and Answers | 100% Solved
if the average cost of production declines as the number of units produced
increases, then the production process exhibits ___ - 🧠ANSWER
✔✔economies of scale
price setter - 🧠ANSWER ✔✔a firm with at least some latitude to set its own
price. The competitive firm
> Ex. The holder of a copyright
price taker - 🧠ANSWER ✔✔a firm with no influence over the price of its
product
pure monopoly - 🧠ANSWER ✔✔the only supplier of a unique product with
no close substitutes
, > Ex. producer of Magic trading cards
monopolistic competition - 🧠ANSWER ✔✔an industry structure in which a
large number of firms produce slightly differentiated products that are
reasonably close substitutes for one another
> Ex. local gasoline retailing
> not perfect competition
monopolistically competitive firms can't expect to earn positive economic
profits in the long run because ___ - 🧠ANSWER ✔✔entry and exit of firms
is similar to perfect competition, since entry and exit from the market
ensures the invisible hand is in effect since there isn't a complete monopoly
an issue monopolisticially competitive firms face is - 🧠ANSWER ✔✔how to
differentiate their products from those of existing rivals.
