Market Structures

A philosophy that government should not interfere with commerce or trade.

• Competitive-price theory

• Perfect competition theory

• Laissez-faire

• Monopoly theory

Which of the following is NOT a condition for a perfect market?

• A large number of buyers and sellers

• Buyers and sellers deal in identical products

• Each buyer and seller acts independently

• Buyers and sellers are reasonably well informed

• Buyers and sellers must stay in their business unless authorized by the government to get out of that markets-ace

The cost added by producing one additional product or service.

• Marginal cost

• Marginal revenue

• Relative cost

• Relative revenue

The additional revenue that will be generated by increasing product sales by one unit.

• Profit

• Marginal Revenue

• Relative Revenue

• Profit Maximization

Mark has just hired a new employee and his output has increased from 105 to 119. His marginal cost was $4.19 but his revenue was $18. What should mark do?

• Keep the amount of employees he has since he is making a profit.

• Fire his new employee due to the new marginal cost being to high.

• Hire more employees until marginal cost equals marginal revenue

• Fire several employees to keep production costs down

What must be true to reach profit maximization?

• MC > MR

• MR > MC

• MR < MC

• MC = MR

The real or imagined differences between competing products in the same industry.

• Nonprice competition

• Product differentiation

• Marketing differential

• Oligopoly

Large firms can work together called _________________. The desire to do so is to raise prices which is called ____________________.

• Collusion; price fixing

• Cartels; price setting

• Teamwork; price-fixer-upper

• Oligopolies; price determination

Which of the following is most likely an example of a monopoly?

• A Starbucks across from Dunkin Donuts

• A gas station in the country by itself

• 3 fast food restaurants all on the same street

• A Kroger 4 miles away from a Walmart

There are 3 types of monopolies identify which of the following answer is correct.

• Natural- production of a product from a single firm

  Geographical- ownership or control of a

  manufacturing method, process, or other scientific

  advance.

  Technological- monopoly based on the absence of other sellers in a certain geographic area

• Natural- production of a product from a single firm

  Geographical- monopoly based on the absence of other sellers in a certain geographic area

  Technological- ownership or control of a

  manufacturing method, process, or other scientific

  advance.

• Natural- ownership or control of a

  manufacturing method, process, or other scientific

  advance.

  Geographical- production of a product from a single firm

  Technological- monopoly based on the absence of other sellers in a certain geographic area

• Natural- ownership or control of a

  manufacturing method, process, or other scientific

  advance.

  Geographical- monopoly based on the absence of other sellers in a certain geographic area

  Technological- production of a product from a single firm