Final Test

Question 1

Perfectly Competitive Market

Answer 1

Market where no individual buyer or seller has power to influence the market price.
Free entry or exit into the market. Buyers and sellers are well informed. Each buyer and seller comprises a small fraction of the market

Question 2

Marginal Revenue

Answer 2

The additional revenue brought in by the firm for sale of one more unit

Question 3

Monopolistic Competition

Answer 3

Large number of firms. Differentiated product. Small to no barriers to entry

Question 4

Oligopoly

Answer 4

Small number of firms. High barriers to entry. Firms are interdependent. Incentive to collude. Each firm has a large market share

Question 5

Payoff Matrix

Answer 5

A table that describes the payoffs of a game of each possible combination of strategies

Question 6

Prisoners Dilemma

Answer 6

a game in which each player has a dominant strategy

Question 7

ATC

Answer 7

TC/Q

Question 8

AVC

Answer 8

VC/Q

Question 9

Shutdown decision

Answer 9

Stay open when ATC>P*>AVC

Question 10

Monopoly

Answer 10

One seller producing a differentiated product