The market for wheat is an example of an oligopolistic market. a monopoly market
ID: 1154002 • Letter: T
Question
The market for wheat is an example of
an oligopolistic market.
a monopoly market.
a perfectly competitive market.
a monopolistically competitive market.
A market with the characteristics of many firms selling an identical product, many buyers, and no restrictions on entry or exit to the market is
a monopolistically competitive market.
a monopoly market.
an oligopolistic market.
a perfectly competitive market.
An industry with a high concentration ratio might still be competitive if
there are no close substitutes for its product.
its barriers to entry are low.
it has a high ratio of value added to sales.
its production is geographically concentrated.
An advantage of a partnership over a corporation is that
a partnership has a perpetual life, while a corporation dies with its owners.
a partnership's owners usually have limited liability, while the entire wealth of owners of a corporation is at risk.
a partnership's profits are taxed only once, while retained profits of a corporation are taxed twice.
a partnership's cost of capital is low relative to that of a corporation.
An example of the principal-agent problem is when
managers devise penalties that eliminate employee waste.
proprietors don't receive any money payment for their entrepreneurial skills.
managers devise incentives that encourage employees to act in the owner's behalf.
managers try to cope with employees that are inefficient.
The profits of a partnership are
taxed once as personal income.
exempt from taxation.
taxed as capital gains indexed for inflation.
subject to a corporate tax.
an oligopolistic market.
a monopoly market.
a perfectly competitive market.
a monopolistically competitive market.
Explanation / Answer
The market for wheat is an example of
Answer – a perfectly competitive market.
The market for wheat is generally considered as an example of a competitive market, because there are many producers, and no individual producer can influence the market price by increasing or decreasing his output. For this reason, each farmer takes the market price as predetermined. Wheat is also considered as identical product. Each farmer called as a price taker.
A market with the characteristics of many firms selling an identical product, many buyers, and no restrictions on entry or exit to the market is
Answer – a perfectly competitive market.
A perfect competition market is that where there will be many number of sellers and buyers and all the sellers sells identical products and there will not be any barriers on entry and exit of firms.
An industry with a high concentration ratio might still be competitive if
Answer – its barriers to entry are low.
High concentration occurs when the concentration ratio ranges from 80% to 100%, a level that indicates the industry is an oligopoly. If the barriers to enter into the industry are less, then the industry with high concentration ratio still can be competitive.
An advantage of a partnership over a corporation is that
Answer – a partnership's profits are taxed only once, while retained profits of a corporation are taxed twice.
The corporation is taxed on its earnings (profits), and the shareholders are taxed again on the dividends they receive from those earnings. But in case of partnership it is taxed once as personal income.
An example of the principal-agent problem is when
Answer – managers devise incentives that encourage employees to act in the owner's behalf.
The principal-agent problem is when the principal to create incentives for the agent to ensure they act as the principal wants.
The profits of a partnership are
Answer – taxed once as personal income.
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