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WorksheetsMore Market Structures
Total questions: 49
Worksheet time: 30mins
Google controls 67% of the web search market. The company has grown and branched off into email, online maps, GPS tracking systems, online data storage and mobile phones. There are competitors like Microsoft and Yahoo, but they own just 18% and 11% of the market, respectively. Which market structure(s) best fit Google? (There are two possible answers, pick both)
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
Using the pizza store graphic, what market structure best fits the pizza industry?
Monopoly
Oligopoly
Perfect competition
Monopolistic competition
In the short run firms in perfect competition will still produce provided:
The price covers average variable cost
The price covers variable costs
The price covers average fixed cost
The price covers fixed costs
The marginal revenue curve in monopoly:
Equals the demand curve
Is parallel with the demand curve
Lies below and converges with the demand curve
Lies below and diverges from the demand curve
In monopoly in long run equilibrium:
The firm is productively efficient
The firm is allocatively inefficient
The firm produces where marginal cost is less than marginal revenue
The firm produces at the socially optimal level
In a monopoly which of the following is not true?
Products are differentiated
There is freedom of entry and exit into the industry in the long run
The firm is a price maker
There is one main seller
In Game Theory:
Firms are always assumed to act independently
Firms are always assumed to cooperate with each other
Firms always collude as part of a cartel
Firms consider the actions of others before deciding what to do
In monopolistic competition:
Firms face a perfectly elastic demand curve
All products are homogeneous
Firms make normal profits in the long run
There are barriers to entry to prevent entry
In monopolistic competition firms profit maximize where:
Marginal revenue = Average revenue
Marginal revenue = Marginal cost
Marginal revenue = Average cost
Marginal revenue = Total cost
In monopolistic competition if firms are making abnormal profit other firms will enter and:
The marginal cost of the firm will shift outwards
The demand curve for the firm will shift inwards
The average cost of the firm will shift downwards
The average variable cost of the firm will increase
Refer to the diagram. What price will the monopolist charge in order to maximise profit?
£3
£7
£4
£5
This monopolostic competitor must be operating in the
red (taking loss).
short run.
long run.
intermediate length.
This monopolistic competitor must be operating in the
red (taking an economic loss).
short run.
long run.
black (making an economic profit).
The unit elasticity point for this model would occur at quantity
1,000.
2,000.
2,150.
approximately 2,500.
This monopolostic competitor is experiencing
economic profit.
normal profit.
economic loss.
economic shutdown.
This pure monopolist would charge price _____ and make a ______ in the ______ run.
P1; profit; long run.
C1; profit; long run.
C1; loss; short run.
P1; loss; long run.
P1; loss; short run.
This graph could represent all of the following except
pure monopoly in the short run.
pure monopoly in the long run.
monopolistic competition in the short run.
oligopoly in the short run.
perfect competition.
Deadweight loss in this graph would best be represented by area
AFCH
FJH
JKL
AFN0
The socially optimal point on this graph would be at point
J
F
L
G
K
The allocatively efficient point on this graph would occur at point
J
F
L
G
K
The fair return point on this graph would occur at point
J
F
L
G
K
The area of ________ would represent the area of _______.
BGHC; loss
FHJ; consumer surplus
AFGB; profit
BGM0; producer surplus
BGM0; total revenue
Profit max would occur at price ____ and quantity ____.
B; M
J; Q
B: N
A; M
B; Q
If perfect price discrimination were performed by this firm they would begin charging at point ___ and move all the way up the demand curve until hitting the origin.
F
J
L
G
If the firm produces Q2 the firm _____ maximizing its profit and is ____.
is; earning a normal profit.
is not; incurring an economic loss.
is not; earning a normal profit.
is; incurring an economic loss.
is; earning an economic profit.
Suppose the market price of the product jumped from P2 to P4, to maximize production the firm would
increase production and earn an economic profit.
not change production and earn normal profit.
increase production and incur an economic loss.
not change production and incur an economic loss.
not change production and earn economic profit.
A market is classified as an oligopoly when
many firms produce the same product.
only one firm sells a product with no close substitutes.
many firms produce a slightly differentiated product.
a few firms compete.
no matter how many firms are in the market, a barrier blocks entry by other firms.
To maximize profit this firm will produce quantity __ at price __.
Q; D
Q; C
Q; B
Q: A
This firm is experiencing what at price C
normal profit.
economic profit.
economic loss.
shutdown.
At price of $2, this firm would produce
6
2.5
0
4
This is a perfectly competitive firm, at a price of $8
it makes economic profit.
it incurs economic loss.
it breaks even.
it shuts down.
This firm is perfectly competitive, at a price of $3
it will make economic profit.
it will incur economic loss.
it will break-even.
it will shut down.
Blueberry producers in Idaho are perfectly competitive, the market demand curve for blueberries is
nonexistent.
downward sloping.
horizontal.
upward sloping.
The price charged by a perfectly competitive firm is
higher the more the firm produces.
lower the more the firm produces.
the same as the market price.
different than the price charged by competing firms.
indeterminate.
if this market is perfectly competitive and the market price is $9 they should produce (in thousands)
6
0
9.5
7
If a monopoly can perfectly price discriminate, then its marginal revenue curve will be
the same as its marginal cost curve.
the same as its demand curve.
a vertical line at profit maximizing output.
the same as its supply curve.
undefined, it does not exist.
