The “Got Milk?” advertising campaign is a good example of A) advertising in a competitive market. B) how advertising in a competitive market does not pay off for a single firm. C) interest groups financed by the industry advertise for the whole industry. D) All of the above. ANSWER D
Date: September 9th, 2020
The demand curve that an individual competitive firm faces is known as its A) excess demand curve. B) market demand curve. C) residual demand curve. D) leftover demand curve. ANSWER C
Date: September 9th, 2020
If a firm operates in a perfectly competitive market, then A) all firms will advertise. B) no firms will advertise. C) the market leader will advertise. D) new firms will advertise. ANSWER B
Date: September 9th, 2020
Which of the following are NOT characteristics of a competitive market? A) There is freedom of entry and exit. B) There are zero transaction costs. C) There are only one or two sellers. D) Buyers and sellers have complete information. ANSWER C
Date: September 9th, 2020
If consumers view the output of any firm in a market to be identical to the output of any other firm in the market, the demand curve for the output of any given firm A) will be identical to the market demand curve. B) will be horizontal. C) will be vertical. D) cannot be determined […]
Date: September 9th, 2020
In a competitive market, if buyers did not know all the prices charged by the many firms, A) all firms still face horizontal demand curves. B) firms sell a differentiated product. C) demand curves can be downward sloping for some or all firms. D) the number of firms will most likely decrease. ANSWER C […]
Date: September 9th, 2020
A market’s structure is described by A) the number of firms in the market. B) the ease with which firms can enter and exit the market. C) the ability of firms to differentiate their product. D) All of the above. ANSWER D
Date: September 9th, 2020
A horizontal demand curve for a firm implies that A) the firm is a monopoly. B) the market the firm is operating in is not competitive. C) the firm is selling in a competitive market. D) the products of that firm are very different from other firms’ products. ANSWER C
Date: September 9th, 2020
In a perfectly competitive market, A) firms can freely enter and exit. B) firms sell a differentiated product. C) transaction costs are high. D) All of the above. ANSWER A
Date: September 9th, 2020
If all conditions for a perfectly competitive market are met, A) firms face sunk cost when entering the market. B) firms’ demand curves are horizontal. C) the market demand curve is horizontal. D) the firms’ demand curves are downward-sloping. ANSWER B
Date: September 9th, 2020
