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Exam 5: Competition and Market Power

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Question 21

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Perfect competition requires a nonstandard product.

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Question 22

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In perfect competition,all businesses in a market produce at the point where ________ equals __________.

A) market price; marginal cost
B) marginal price; marginal cost
C) average revenue; average cost
D) average price; average cost

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Question 23

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A market where there is only one seller,and buyers have no good alternative,is called a(n)

If two drugstores in a market agree that they will both sell Fritos at a higher price,and neither will undercut the other,this is called

Which of the following is NOT an example of a barrier to entry?

A ___________ makes it more difficult for a competitor to enter a market.

$\begin{array}{l}\begin{array} { c | c } \begin{array} { c } \text { Output } \\\text { (Bushels of } \\\text { Barley) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (Dollars) }\end{array} \\\hline 10 \text { bushels } & \$ 0.30 \\20 \text { bushels } & \$ 0.60 \\30 \text { bushels } & \$ 0.90 \\40 \text { bushels } & \$ 1.20\end{array}\\\text { Table } 5.1\end{array}$ Refer to Table 5.1,which gives Farmer McColl's marginal cost function for barley.If Farmer McColl is currently producing 20 bushels of barley,which of the following is the market price for a bushel of barley?

A profit-maximizing monopolist will always charge _______ a perfect competitor would.

Natural monopolies have been slowly eroded by

Natural monopolies include

In a market with perfect competition,given enough time and no barriers to entry,profits will tend toward zero in the long run.

In perfect competition,if there are no barriers to entry,only the lowest-cost businesses survive over the long run.

The profit-maximizing rule says that a seller will expand output up to the point

$\begin{array}{l}\begin{array} { c | c } \begin{array} { c } \text { Output } \\\text { (Bushels of } \\\text { Barley) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost } \\\text { (Dollars) }\end{array} \\\hline 10 \text { bushels } & \$ 0.30 \\20 \text { bushels } & \$ 0.60 \\30 \text { bushels } & \$ 0.90 \\40 \text { bushels } & \$ 1.20\end{array}\\\text { Table } 5.1\end{array}$ Refer to Table 5.1,which gives Farmer McColl's marginal cost function for barley.Suppose Farmer McColl is one of 20 farmers in the barley market,and all of the farmers have identical marginal cost functions.If the market price of barley is $1.00 per bushel,which of the following could be the total amount of barley produced in the market?

In perfect competition,a profit-maximizing business will expand until its _________ equals the market price.

Under the right circumstances,competition could be a win-win proposition for companies and consumers.

Companies will often spend considerable amounts of money to create a ____________ in regards to their brand name.

Over the long run,why do low-cost providers generally prevail?

Marginal revenue is generally __________ for businesses that do not operate under conditions of perfect competition.

From World War II to the early 1970s,GM,Ford,and Chrysler enjoyed