Under perfect competition, output is determined by:
A. Demand and equilibrium price
B. Fixed expenses
C. Individuals
D. Industry supply curve
Which of the following is NOT a characteristic of a perfectly competitive market?
A. Free entry and exit
B. No substitutes
C. Numerous sellers
D. Perfect information
Perfect competition pushes firms to
A. Efficiency
B. Maximum possible output
C. Maximum sales
D. Take over other firms
A factor that makes it difficult for firms to enter a market is called...
A. A barrier to entry
B. A block to entry
C. An impediment to entry
D. An obstacle to entry
Which is not a requirement for a market to have perfect competition?
A. Consumers and producers are informed about products
B. Diverse buyers and sellers participate in a market
C. Sellers can freely enter and exit the market
D. Sellers offer the same products
In a perfectly competitive market, a firm
A. Can easily take control of the market
B. Can influence the price of the good across the market
C. Only has control over how much they decide to produce
D. Can influence demand across the market through advertising
Perfect competition is best described as a market with
A. Few firms producing essentially the same product
B. Few firms producing very different products
C. Many firms producing essentially the same product
D. Many firms producing very different products
The market demand curve for a perfectly competitive industry is QD = 12 - 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium if
A. P = 3 and Q = 6
B. P = 6 and Q = 9
C. P = 5 and Q = 2
D. P = 4 and Q = 4
A perfectly competitive firm should reduce output or shut down in the short run if market price is equal to marginal cost and price is
A. Greater than average total cost
B. Less than average total cost
C. Greater than average variable cost
D. Less than average variable cost
If the market demand curve for a commodity has a negative slope, then the market structure must be
A. Perfect competition
B. Monopoly
C. Imperfect competition
D. The market structure cannot be determined from the information given
If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is a
A. A monopolist
B. A monopolistic competitor
C. An oligopolist
D. A perfect competitor
If a firm sells its output on a market that is characterized by a single seller and many buyers of a homogeneous product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is
If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource mobility, then the firm is
If a firm sells its output on a market that is characterized by few sellers and many buyers and limited long-run resource mobility, then the firm is
Branding their goods and making the brand name familiar by means of advertising is an example of non-price competition.
Monopolies CANNOT be created by law.
Legal monopolies tend to consist of nationalised industries.
Restrictive trade practices occur when firms in an industry agree to not compete with each other but to restrict the entry of any new firm.
The Organization of Petroleum is a form of a cartel.
A monopoly is NOT capable of restricting the supply of a product.
Large scale production may enable firms to produce at a very low average cost is a barrier to entry.
