Micro 4.1 - Imperfect Competition

Categorize

Options (17)

Strawberry Market

Cereal Market

Market for Cars

Fast Food Market

Market for Operating Systems (Microsoft Windows)

Clothing Market

Restaurant Market

Market for Tomatoes

Market for Wheat

Market for Fish

Market for Eggs

Telecommunications Market

Airline Industry

Market for Soft Drinks

Water Supply

Electricity Distribution

Postal Services

Every product is sold in a market that can be considered one of the above market structures.

Place each in its market structure.

Perfect Competition

Monopolistic Competition

Oligopoly

Pure Monopoly

Multiple Select

The four main types of market structures are listed below.

Which of them are considered imperfect competition? (Select all that apply)

• Perfect Competiton

• Monopolistic Competition

• Oligopoly

• Pure Monopoly

Multiple Choice

Which of the following is NOT a type of barrier to entry in imperfectly competitive markets?

• High fixed/start-up costs

• Geography or ownership of raw materials

• Legal barriers

• Low product differentiation

Multiple Select

Select all characteristics that apply to imperfectly competitive firms.

• They are price makers

• They have downward sloping demand curves

• They are price takers

• Marginal revenue equals demand

Fill in the Blanks

Fill in the blank: When the price is $8 and the quantity demanded is 3, the total revenue is

Multiple Choice

What is the marginal revenue when the price drops from $8 to $7?

• $8

• $6

• $4

• $2

Multiple Select

Which of the following statements are correct based on the table data?

• Marginal revenue decreases as quantity increases.

• Total revenue increases as quantity increases.

• Price remains constant as quantity increases.

• Marginal revenue is always equal to price.

Multiple Select

Based on the graphs and tables, select all correct statements about the relationship between marginal revenue and demand in a monopoly.

• Marginal revenue is always less than the price (demand) except for the first unit sold.

• Marginal revenue can become negative if the price is lowered too much.

• Marginal revenue equals demand at every quantity.

• Total revenue is maximized when marginal revenue is zero.

Multiple Choice

Which of the following best explains why MR becomes negative as shown in the tables?

• Because the firm must lower the price on all units to sell more, causing total revenue to decrease at higher quantities.

• Because demand increases at higher prices.

• Because marginal cost exceeds marginal revenue.

• Because fixed costs increase with output.

Fill in the Blanks

For monopolies, the MR curve lies

the demand curve.

Open Ended

Why is the marginal revenue below demand?

Open Ended

Why will a monopoly only produce in the elastic range of the demand curve?

Multiple Select

Which of the following statements are correct about the relationship between total revenue and elasticity, according to the Total Revenue Test?

• If price falls and total revenue increases, demand is elastic.

• If price falls and total revenue falls, demand is inelastic.

• If price rises and total revenue falls, demand is elastic.

• If price rises and total revenue rises, demand is inelastic.

Open Ended

Reflecting on today's lesson, what questions do you still have about how imperfectly competitive markets operate or how market structure affects business decisions?