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WorksheetsMARKET STRUCTURE 3
Total questions: 15
Worksheet time: 8mins
Predatory pricing can be defined as......
pricing below AVC to remove competitors within the market
pricing below AVC to deter new entrants to the market
pricing between profit max and normal profit
pricing at normal profit to flood the market with your product
pricing at mr=mc
Limit pricing can be defined as..........
pricing below AVC to get rid of existing competitors
pricing at normal profit
pricing between profit max and normal profit to deter new entrants
pricing at mr=0
pricing at mc=mr
Advertising could be described as what type of cost?
variable
semi-variable
marginal
sunk
opportunity
nash equilibrium occurs at the outcome where there is......
no tendency to change
tendency to change
maximum joint profits
maximum individual profits
none of the above
In game theory firms have an incentive to collude so that they can......
maximise normal profits
maximise revenue
maximise profits
maximise joint or combined profits
maximise output
tacit collusion involves...........
a formal agreement
a formal handshake
a formal nose rub
no formal or verbal agreement
none of the above
A dominant monopoly is where.............
one firm controls at least 25% market share
one firm controls at least 40% market share
only 1 supplier in the market
low market concentration
One benefit or a profit max monopoly is........
diseconomies of scale
external economies of scale
x inefficiency
potential for dynamic efficiency
low prices
What happens to consumer surplus with first degree price discrimination?
Increases
Decreases
Removed
None of the above
Which one of the following is an example of second degree price discrimination?
Price reductions on out of season clothing
Student discount
Business class travel
Cheaper price tickets for women
Which of the following is the best form of price discrimination
peak and off peak rail travel
business and economy class
short back and sides and full colour
pensioner cinema ticket and adult cinema ticket
A natural monopoly occurs in markets with very high........
fixed and sunk costs
opportunity costs
variable costs
hidden costs
external costs
An example of a natural monopoly would be........
supermarket industry
agricultural industry
hairdressing industry
rail industry
taxi industry
A benefit of a natural monopoly is very large
internal economies of scale
diseconomies of scale
external economies of scale
unit costs
contestability
For a natural monopoly to operate at p=mc it will likely have to be
taxed
subsidised
fined
investigated
