A) Price takers need to compete through advertising because they cannot choose their own price,whereas competitive price searchers compete primarily through their pricing policies.
B) Price takers are exposed to competition because of low barriers to entry,whereas competitive price searchers are somewhat immune from competition due to relatively high barriers to entry.
C) Price takers can never earn economic profits,whereas competitive price searchers can earn economic profits in the short run.
D) Price takers produce identical goods,whereas competitive price searchers produce goods that are differentiated from the goods produced by their competitors.
F) A) and C)
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A) Each firm produces a differentiated product.
B) The entry barriers are high.
C) Each firm faces a downward-sloping demand curve.
D) The number of firms in the market is large.
F) A) and D)
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A) $0
B) $2
C) $7
D) $42
F) All of the above
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Competitive price-searcher markets do ha...View Answer
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A) obtaining governmental control over the market so that a new product has some chance of being successful.
B) knowing from the start the proper output and price to set for each new product.
C) choosing the best structure,size,and scope of production for the firm to produce a new product.
D) knowing in advance with certainty what products consumers will want to buy.
F) All of the above
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A) consumers will be worse off.
B) the demand for the products that are good substitutes for the new product will increase.
C) some of the existing products will become obsolete and businesses producing those products will fail.
D) total employment will decline if there are business failures.
F) A) and D)
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The dentists probably know that economic...View Answer
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A) charge higher prices to customers who have better access to substitutes.
B) charge everyone the same price but limit the quantity they are allowed to buy.
C) increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand.
D) reduce per-unit cost to the firm by charging higher prices to those with the most inelastic demand and lower prices to those with the most elastic demand.
F) A) and D)
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A) can expect many new rivals to enter regardless of current profitability.
B) can expect competing firms to enter the market if the activity is profitable.
C) can never earn economic profit.
D) will always be able to earn economic profit.
F) B) and D)
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A) that is highly contested by two,and only two,rival firms.
B) in which the costs of entry and exit are low.
C) characterized by high profitability and government regulation.
D) characterized by a large number of firms;in essence,the term means the same thing as pure competition.
F) B) and C)
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A) $4
B) $9
C) $10
D) $54
F) C) and D)
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A) increase output if it is a price searcher,but this may not be proper if it is a price taker.
B) increase output if it is a price taker,but this may not be proper if it is a price searcher.
C) decrease output,regardless of whether it is a price taker or a price searcher.
D) increase output,regardless of whether it is a price taker or a price searcher.
F) C) and D)
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A) Price will equal marginal cost at the profit-maximizing level of output;profits will be positive in the long-run.
B) Price will always equal average variable cost in the short run and either profits or losses may result in the long run.
C) Marginal revenue will equal marginal cost at the short run,profit-maximizing level of output;in the long run,economic profit will be zero.
D) Marginal revenue will equal average total cost in the short run;long-run economic profits will be zero.
F) B) and D)
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A) a pizza parlor operating near a college campus
B) Shell Oil Company,a major refiner of gasoline
C) a Texas rancher that raises beef cattle
D) Boeing,the aircraft manufacturer
F) A) and C)
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A) The firms will always make positive economic profits in the long run.
B) The firms will always make positive economic profits in the short run.
C) The firms will always make zero economic profits in the short run.
D) The firms will always make zero economic profits in the long run.
F) A) and C)
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A) market is not in long-run equilibrium.
B) firms are earning the normal rate of return.
C) firms are performing worse than the firms in other markets.
D) firms are performing better than firms in other markets.
F) None of the above
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A) there is a competitive (normal) profit rate and few firms operating.
B) the costs of entry and exit are high.
C) each firm produces an identical product.
D) the fixed costs of firms in the market are also sunk costs.
F) C) and D)
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A) the number of firms in the market decreases.
B) each existing firm experiences a decrease in demand for its product.
C) each firm experiences an upward shift to its marginal cost and average total cost curves.
D) each existing firm's average total cost falls to bring economic profit back to zero.
F) A) and B)
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A) earning zero economic profit.
B) likely to exit the market in the long run.
C) producing its efficient scale of output.
D) not maximizing its profit.
F) B) and D)
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A) rival firms will be attracted into the market.
B) high barriers to entry will prevent rival firms from entering the market.
C) product differentiation will prevent new firms from making a profit.
D) the profits will persist because the firms face a downward-sloping demand curve.
F) A) and D)
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