Perfect Competition

Descripción

Perfect competition quiz
2016: Nicolas Cr
Test por 2016: Nicolas Cr, actualizado hace más de 1 año
2016: Nicolas Cr
Creado por 2016: Nicolas Cr hace casi 9 años
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Resumen del Recurso

Pregunta 1

Pregunta
Why doesn´t an individual have the power to affect the price of a product in a perfectly competitive market?
Respuesta
  • Because no individual has a part big enough of the market to affect it
  • Because an enterprise is the owner of the market
  • Because there is no competition
  • Because the market is unfair

Pregunta 2

Pregunta
In a perfect competition market, who determines the prices?
Respuesta
  • The owners of firms
  • Consumers, by market supply and market demand
  • The product being produced
  • The availability of the product in the market

Pregunta 3

Pregunta
Why can´t a firm set its prices below market price?
Respuesta
  • Because they would not have costumers, as they prefer other brands and would remain loyal to this other brands
  • The firm wouldn´t be able to acomodate all of the new costumers they would have, making demand to increase, costs to sky rocket and the firm having to raise prices to remove certain costumers
  • The market would see a decrease in the demand of the product, as it would become less exclusive so a shift in consumption towards homogenous products would be seen
  • As consumers are very inelastic, they would wan´t to see even a higher drop in the price, thus for waiting until that happens to consume

Pregunta 4

Pregunta
What can a firm in a perfectly competitive market choose?
Respuesta
  • Price of the good
  • Demand for the good
  • Supply of the good
  • Output produced

Pregunta 5

Pregunta
What is revenue
Respuesta
  • Demand divided units sold
  • Units sold minus supply
  • Price charged times units sold
  • Income times supply

Pregunta 6

Pregunta
Why is revenue usually higher in the short run?
Respuesta
  • Because the firm is more motivated to work
  • Because the firm is highly recursive
  • Because there is less competition
  • Because the owner pays more attention

Pregunta 7

Pregunta
When does the entry to a market stop?
Respuesta
  • When supply is low and demand is high
  • When demand is high and supply is low
  • Until a new market appears
  • Until price is average to total cost

Pregunta 8

Pregunta
Are the following characteristics of perfect competition? There are a large number of sellers, price can be changed by individual firms, and consumers have perfect knowledge
Respuesta
  • True
  • False

Pregunta 9

Pregunta
Perfect competition markets mean no profit
Respuesta
  • True
  • False

Pregunta 10

Pregunta
P=D
Respuesta
  • True
  • False
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