Chapter 5 - Prefect Competition

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Which of the following is a basic characteristic of perfect competition?
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Which of the following is a basic characteristic of perfect competition?
A large number of buyers and sellers.
Which of the following industries most closely resembles perfect competition?
Agriculture.
Monopolistic competition resembles perfect competition to the extent that?
Entry barriers are either weak or non-existent in both.
An industry composed of three firms, each of which considers the potential reactions of its rivals in making pricing decisions, yet is not concerned with the potential entry of other firms, can best be described as?
An Oligopoly.
Which of the following industries most closely approximates a Monopoly?
A Public Utility.
In which of the fooling market structures is the entry of new businesses the most difficult?
A Monopoly.
Entry barriers can be the result of?
Legal Obstacles.
An entry barrier that involves cost advantage is?
Market Experience.
An entry barrier that involves illegal pricing strategies is?
Predatory Pricing.
A business's market power will be greater if its?
Size is large in relation to its industry.
The type of market in which businesses possess the least market power is a?Perfectly competitive market, as each business is a price taker.A perfectly competitive seller is?A Price Taker.The demand curve of an individual perfectly competitive business is?Horizontal at a price set by the forces of market supply and demand.The shape of the demand curve faced by an individual business in a perfect competitive market is the result of?The business's inability to affect price.Price is constant or given to the individual business selling in a perfectly competitive market because?Each seller is a price taker.A perfectly competitive business's demand curve is a?Straight line.Define marginal revenueThe change in total revenue that results from a one-unit increase in the quantity sold.What is the Profit Maximizing Output Rule?States that profit is maximized when marginal revenue equals marginal cost.The demand curve for a perfectly competitive firm is?Horizontal.What are the features of perfect competition?Many buyers, Standard product and easy entry and exit.An Oligopoly is defined as what?A market in which there are only few businesses and entry to the industry is restricted.When would you consider shutting down your business?When the variable cost exceeds the total revenue.