economics chapter 8 review. 1 a(n) ___________ market has many buyers and sellers that all sell...
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Economics
Chapter 8 Review
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1A(n) ___________ market has many buyers and sellers that all sell identical goods.
Perfectly competitive
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2A type of economic competition whereFew sellersIdentical or slightly differentiated products
Significant barriers to entryOligopolistic market
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3A clothing store faces this type of competition.
Monopolistic competitive
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4A seller that can sell its good only at the equilibrium price would be considered a(n) __________.
Price taker
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5Exists when a seller charges different prices to different buyers and the price differences do not reflect cost differences.
Price discrimination
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6In which type of market do all firms produce exactly the same type of good?
Perfect competition
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7OPEC is an example of a
Cartel
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8In which type of market do buyers and sellers have all the relevant information about prices, product quality, and supply?
Perfect competition
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9A soybean farmer faces this type of competition.
Perfectly competitive
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10In a monopoly, sellers are _________.
Price searchers.
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11Airlines operate in this type of market.
Oligopolistic.
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12Firms in monopolistic competitive markets are _______.
Price searchers
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13A market structure with
Many buyers & sellersIdentical productsSellers & buyers have all relevant information
Easy entry & exit Perfect competition
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14An agreement that specifies that firms will act in a coordinated way to reduce competition among them.
Cartel agreement
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15Legislation passed for the stated purpose of controlling monopoly power and preserving and promoting competition.
Antitrust law
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16Firms in perfectly competitive markets are __________.
Price takers
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17A type of economic competition whereThere is one sellerThe product has no close substitutes
The barriers to entry are high
Monopoly
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18Which market structure relies heavily on advertising to differentiate their products?
Monopolistic competition
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19When a single producer has complete control over one kind of good or service, the market structure is called _________.
Monopolistic
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20When it comes to determining price, sellers in a perfectly competitive market have __________.
No control
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21Firms in oligopolistic markets are __________.
Price searchers
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22In a perfectly competitive market, products must be ____________.
Identical
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23Making secret agreements that effectively reduce competition.
Colluding
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24The market structure that consists of one seller who sells a product that has no close substitutes is called a(n) ____ market.
Monopoly
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25A(n) ________ is formed when firms decide to act in a coordinated way to reduce the competition among them and raise their profits.
Cartel agreement
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26A type of competition where there areMany buyers and sellersProducts are slightly differentiated
No barriers to entryMonopolistic competition
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27A _______ exists when the government grants a firm the exclusive right to provide a particular good or service and excludes all others from doing so.
Public franchise
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28Things such as patents or copyrights, which make it difficult for a new business to open in a particular market, are considered __________.
Barriers to entry
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29Laws meant to control monopoly power and to preserve and promote competition are referred to as _________ laws.
Antitrust
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30A firm with such a low average total cost that only it can survive in the market.
Natural monopoly
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31A right granted to a firm by government that permits the firm to provide a particular good or service and excludes all others from doing so.
Public franchise.
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True/False Statements
Chapter 8 Review
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1Monopolists are always profitable.
False
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2The U.S. automobile industry operates in a perfectly competitive market.
False
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3The vast majority of firms face perfect competition.
False
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4Cartel agreements are legal in the U.S.
False
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5Senior citizens discounts are an example of illegal price discrimination.
False
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6Monopolists can charge whatever price they want and still be profitable.
False
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7It is difficult for monopolists to know what price to charge.
True
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8It is easy for sellers in a perfectly competitive market to raise their prices whenever they feel like it.
False
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9Price takers can sell all their goods at the equilibrium price.
True
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10Entry into and exit from an oligopolistic market is easy.
False
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11When price rises in a perfectly competitive market, new producers will enter the market.
True
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12When a firm operates as a monopoly, it means there are high barriers of entry for competitors to enter the market.
True
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13A characteristic of the farming industry is the ability of producers to slightly differentiate their products.
False
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14Sellers who produce identical products produce the quantity of output at which marginal revenue equals marginal cost.
True
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15As the supply of goods in a market increases, it causes the price to fall until firms no longer see an incentive to enter the market.
True
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16For a monopolistic competitor, a rise in the price of its good will not cause all its customers to leave it and select the competitor's product.
True
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Final QuestionPure
Competition
Monopoly Monopolistic
Competition
Oligopoly
Description
Price Taker or Price Searcher?
Non-price competition?