AP Micro Market Structures

Boeing and Airbus are in a duopoly that has reached the monopoly outcome. Boeing increases it's production. If Airbus increases its production, it's profits will ______ and Boeing's profits will ________.

• increases; decreases

• increases; decreases

• decreases; decreases

• increases; does not change

• decreases; increases

If the ice cream industry is perfectly competitive with a market price of $3 per bar, and Sigalow's Sweets charges, $3.50 per bar, how many bars will Sigalow sell?

• more than he would at a price of $3

• some, but fewer than he would at a price of $3

• just as many as he would at a price of $3

• none

• more info is needed about the prices charged by other shops

Zoe's Bakery determines that P < ATC and P > AVC. Zoe should:

• continue to operate even though she is taking an economic loss.

• continue to operate, as she is making an economic profit.

• shut down immediately, as she is taking an economic loss.

• raise the price until she has maximized her profits.

The price charged by a perfectly competitive firm is

• lower the more the firm produces.

• higher the more the firm produces.

• the same as the market price.

• indeterminate.

• different than the price charged by competing firms.

The difference between a firm's total revenue and its total opportunity cost is the firm's

• marginal revenue

• economic profit

• marginal profit

• normal profit

Which of the following is a condition of perfect competition?

• products produced by rival firms are perfect substitutes

• individual firms can affect market supply

• industry sales are small

• restricted entry and exit

AT&T, Verizon, Sprint, and T-Mobile as firms in the wireless carrier industry are an example of a(n)

• Monopoly

• Oligopoly

• monopolistic competition

• perfect competition

What is the difference between perfect competition and monopolistic competition?

• PC has a large # of small firms while MC does not.

• PC has barriers to entry while MC does not.

• In MC, firms produce identical goods, while in PC, firms produce slightly different goods.

• In PC, firms produce identical goods, while in MC, firms produce slightly different goods.

• PC has no barriers to entry while MC does.

A pure monopoly will produce the same amount of output as perfect competition when

• all the demanders pay one price.

• it provides more consumer surplus than perfect competition.

• it can perfectly price discriminate.

• it is forced into the fair return price.

List the four market structures in order from least competitive to most competitive.

• Oligopoly, Monopoly, Perfect Competition, Monopolistic Competition

• Perfect Competition, Oligopoly, Monopoly, Monopolistic Competition

• Monopoly, Oligopoly, Monopolistic Competition, Perfect Competition

• Monopoly, Monopolistic Competition, Perfect Competition, Oligopoly