____ 13. There are two types of markets in which firms face some competition yet
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Question
____ 13. There are two types of markets in which firms face some competition yet are still able to have some control over the prices of their products. What are the names given to these market structures?
a.
monopolistic competition and oligopoly
b.
duopoly and triopoly
c.
perfect competition and monopolistic competition
d.
duopoly and imperfect competition
____ 14. What, essentially, is an oligopoly with a large number of firms?
a.
a large monopolist
b.
a large monopolistically competitive market
c.
a group of competitive firms
d.
a group of monopolistic firms
____ 15. What is the profit-maximizing price for monopoly firms?
a.
a price that exceeds marginal cost
b.
a price that exceeds fixed costs
c.
a price that exceeds average revenue
d.
a price that equals marginal revenue
____ 16. Firms do not need to be concerned about striking a balance between the price effect and the output effect when making production decisions in which one of the following types of markets?
a.
oligopolies
b.
duopolies
c.
monopolies
d.
competitive markets
a.
monopolistic competition and oligopoly
b.
duopoly and triopoly
c.
perfect competition and monopolistic competition
d.
duopoly and imperfect competition
Explanation / Answer
13) a. monopolistic competition and oligopoly. This is because perfect competition as firms behaving
as price takers. Only in these two markets we see firms face competition from rivals yet they have a
downward sloping demand.
14) d. a group of monopolistic firms. The competition is less between firms as they each earn
siginificant profits yet the fight is to increase their market share at the expense of the rival
15) a. a price that exceeds marginal cost. Monopoly uses MR = MC rule which gives a unique price
and quantity combination. Since P > MR for monopoly, P is also > MC
16) d.competitive markets
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