Firms are considered to be price searchers, as opposed to price takers, in all of the following market types except: A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly. ANSWER A
Date: September 10th, 2020
Why is the price elasticity of demand a relative measure? That is, why is elasticity measured in percentage terms rather than in absolute terms? A) So the coefficient of elasticity will not be dependent on the physical units of the good. B) Because absolute measures do not account for the direction of the change in […]
Date: September 10th, 2020
The price elasticity of demand is calculated as: A) the change in price divided by the change in quantity demanded. B) the change in quantity demanded divided by the change in price. C) the percentage change in price divided by the percentage change in quantity demanded. D) the percentage change in quantity demanded divided by […]
Date: September 10th, 2020
Which of the following conditions ensures that excess profits cannot persist in a perfectly competitive market over the long run? A) Large number of firms in the industry. B) Outputs of the firms are perfect substitutes for one another. C) Complete information is available to all market participants. D) Ease of entry into the market. […]
Date: September 10th, 2020
When calculating the price elasticity of demand, which of the following conditions must be satisfied? A) All other factors that influence demand must be held constant. B) Prices of related goods must be held constant but all other factors must be allowed to vary. C) Prices of related goods must be allowed to vary but […]
Date: September 10th, 2020
Assume the demand for a good is price inelastic, i.e., ed < 1 (in absolute value). This means that if price decreases by 50 percent, quantity demanded will: A) increase by more than 50 percent. B) decrease by more than 50 percent. C) increase by less than 50 percent. D) decrease by less than 50 […]
Date: September 10th, 2020
According to the text, the price elasticity of demand for oranges has been estimated to be -0.62. This implies that a doubling of the price of oranges would cause the quantity demanded of oranges to: A) increase by 6.2 percent. B) decrease by 6.2 percent. C) increase by 62 percent. D) decrease by 62 percent. […]
Date: September 10th, 2020
The market structure that is characterized by a small number of large firms that have some market power is called: A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly. ANSWER C
Date: September 10th, 2020
According to the text, the price elasticity of demand for bath tissue has been estimated to be -2.42. This implies that a 10 percent decrease in the price of bath tissue would cause the quantity demanded of bath tissue to: A) increase by 2.4 percent. B) decrease by 2.4 percent. C) increase by 24.2 percent. […]
Date: September 10th, 2020
Which of the following market structures is most similar to perfect competition? A) Monopsony. B) Monopolistic competition. C) Oligopoly. D) Monopoly. ANSWER B
Date: September 10th, 2020
