Chapter 7-Econ

In a market economy with perfect competition, sellers

• control prices

• enter and exit the market freely

• join with other sellers to influence prices

• have incomplete info about market conditions

Some examples of standardized products include

• ag products, such as milk

• clothing products, such as belts and shoes

• electronics, computers, tvs

• furniture products, like tables and couches

In a market economy with imperfect competition sellers

• are always well-informed of market conditions

• never have any control over price

• offer only standardized products

• sometimes join with other sellers to influence prices

A market structure in which only one seller sells a product for which there are no close substitutes is called a

• cartel

• monopoly

• oligopoly

• trust

Monopolists are able to control pries because they have

• a lot of competition and there are substitutes

• a lot of competition and there are no substitutes

• no competition and there are substitutes

• no competition and there are no substitutes

A monopoly in which the costs of production are lowest when only one firm provides output is called a

• geographic monopoly

• government monopoly

• natural monopoly

• technological monopoly

A monopoly that exists because a firm controls a manufacturing method is called a

• geographic

• government

• natural

• technological

A situation in which the average cost of production falls as the producer grows larger is called

• barrier to entry

• economies of scale

• predatory pricing

• public disclosure

Advertising to try to get customers to buy your product rather than another is a form of

• antitrust competition

• focus competition

• monopolistic competition

• nonprice competition

What are expenses that a new business must pay to enter a market?

• basic costs

• entrence costs

• initiation costs

• start-up costs