One characteristic of perfect competition is that sellers are able to enter and exit the market freely.
In order to price discriminate, sellers must be able to guess the demand curves of different groups, one of which is more elastic than the others.
In perfect competition, many companies compete in an open market to sell products that are similar but not identical.
In oligopoly each firm produces so little of the product compared to the total supply that no single firm can hope to influence price.
In the long run in perfect competition output will reach the point where each firm just covers all of its costs.
If we define a good or service provided by a company narrowly enough, we can usually find substitute goods from a different source.
A perfectly competitive market will result in more units sold but at a higher market price than in a monopoly.
Complete this sentence: In a monopoly market, the market price will be _____ the price in a perfectly competitive market.
What was the chief effect of the Sherman Antitrust Act?
The federal government won the power to prevent monopolies and mergers that interfered with trade between states.
What is the definition of an oligopoly?
two to four firms producing 70 percent to 80 percent of the output
Which of the following is NOT an example of barriers to entry?
In some counties, laws require retail stores to be closed on Sundays.
Why does the government sometimes give monopoly power to a company by issuing a patent?
The company can then profit from their research without competition.
What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
Consumers will substitute a rival's product.
Which of the following is NOT a condition for perfect competition?
Sellers offer a wide variety of products
Complete this sentence: In a monopoly market, the market quantity sold will be _____ the quantity sold in a perfectly competitive market.
Sunshine Island has three large supermarkets that supply most of the groceries for the island's population. A gas station also sells a very small selection of groceries. How would you describe the market for groceries on Seaside Island?
A division of customers into groups depending on how much they will pay for a product is
A factor that causes a producer's cost per unit (average cost) to fall as output rises is a(n)
Economy of Scale
In perfect competition, the prices that consumers pay and the revenue that suppliers receive accurately reflect how much the market ____ the resources that have gone into the product.
Monopolistically competitive firms have some control over their price due to product _____.
Sometimes a new ____ can destroy a natural monopoly, such as when the development of microwave technology ended the AT&T long distance monopoly.