ECO 561 Week 3 Quiz 100% Correct

1 . A purely- or perfectly-competitive firm would be characterized by which of the following?

2 . For a purely-competitive firm, price must be

3 . What will excessive or economic profits induce for a firm in any industry structure?

4 . A pure-monopoly firm’s demand curve is also the market demand curve. This kind of firm may successfully engage in price discrimination to increase its total profit if it

5 . Oligopolies are characterized by a small number of firms where the top three firms hold the majority of the market. If in an oligopoly market, firm A is almost twice as big as firm B and firm C then

6 . In a monopolistic competition industry, if one firm appreciably increased its price from the existing equilibrium price, which of the following outcomes would most likely ensue?

7 . Which factor characterizes the competitive relationship between firms in an oligopoly market structure?

8 . Unregulated (natural) monopolies maintain their status through a variety of measures. Whether any particular measure can effectively constrain new firms from entering the market depends on

9 . Regulated monopolies are empowered by public authority for which specific reason?

10 . Using a significantly greater economy of scale—with attendant lower, long-run average total costs—to restrict the market entry of new competitors

11 . In technology-intensive oligopolies –characterized by dynamically evolving product design—restricting the entry of additional firms is

12 . Whether the market structure is monopolistic or oligopolistic, a firm may increase consumer demand for its product as an overall portion of market share if

13 . One difference between firms already established in a monopolistic competition industry and those attempting to enter it is that

14 . An average firm in an industry characterized by a homogeneous product, relatively low barriers to entry, and a low concentration ratio

15 . A monopolistic firm may operate in a relatively mature market with little likelihood for significant change in technology or process efficiencies. To maximize its profits, such a firm might

16 . Production differentiation can effectively be achieved by

17 . While mass retail industries have one or several dominant producers, smaller firms have a limited set of nonpricing options. The most feasible of these include

18 . In monopolistic competition industries, effective product differentiation is illustrated by

19 . Differentiation strategies vary in degree of effectiveness from one type of market structure to another. For firms other than perfect competition

20 . If a firm’s industry devolved from a monopolistic competition into an oligopolistic structure,

21 . A firm can increase both profit and per-unit profit margin by lowering production costs. To make this a long-term outcome, the firm should

22 . A firm’s cost-reduction strategies may span multiple stages, from acquisition of production input factors to product service and maintenance. When seeking to lower cost in the short term, firms should

23 . Firms can shift their marginal cost curves to the right, resulting in higher outputs at the same or lower maximum-profit prices. This can be done by