If a firm happened to be the only seller of a particular product, it might behave as a price taker as long as A) buyers have full information about the firm’s price. B) the transaction costs of doing business with this firm are low. C) there are many buyers. D) there is free entry and […]
Date: September 9th, 2020
Even if two products have different characteristics, such as color, the products are only considered heterogeneous if consumers A) consider the two products as perfect complements. B) consider the two products as perfect substitutes. C) consider the two products as imperfect substitutes. D) consider the two products as imperfect complements. ANSWER C
Date: September 9th, 2020
If a firm operates in a perfectly competitive market, then it will most likely A) advertise its product on television. B) take the price of its product as determined by the market. C) have a difficult time obtaining information about the market price. D) have an easy time keeping other firms out of the market. […]
Date: September 9th, 2020
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
Firms that exhibit price-taking behavior A) wait for other firms to set price, take it as given, and charge a higher price. B) have outputs that are too small to influence market price and thus take it as given. C) take pricing behavior in their own hands. D) are independently capable of setting price. […]
Date: September 9th, 2020
In the absence of any government regulation on price, if a firm has no power to set price on its own, one can safely conclude A) the demand curve for the firm’s product is horizontal. B) there aren’t many firms in the industry. C) the market is in long-run equilibrium. D) the firms in this […]
Date: September 9th, 2020
Many used car owners and used car dealers describe their different cars for sale in the local newspapers and list their asking price. Many people shopping for a used car consider the different choices listed in the paper. The market for used cars could be described as A) relatively competitive. B) perfectly competitive. C) non-competitive. […]
Date: September 9th, 2020
Many car owners and car dealers describe their different cars for sale in the local newspapers and list their asking price. Many people shopping for a used car consider the different choices listed in the paper. The absence of which condition prohibits this market from being described as perfectly competitive? A) Buyers and sellers know […]
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
