cht 9-10

Question 1

Perfect Competition

Answer 1

thousands of sellers of a good, same good, no say over price ( determined in the market)

Question 2

Monopoly

Answer 2

only one producer, large market power ( pricing)

Question 3

Monopolistic competition

Answer 3

many sellers, each produce a differentiated good ( same but their own take) ex; clothes, shoes

Question 4

oligopy

Answer 4

very few sellers, interdependent( decision made by 1 firm will affect the decisions of the other firms) ex; apple and android, at&t and xfinity

Question 5

price takers

Answer 5

the firms have to accept whatever price prevails in the market

Question 6

If MR is greater than Mc you..

Answer 6

keep producing

Question 7

If MC is greater than MR you…

Answer 7

Cut back

Question 8

if P is greater than ATC you…

Answer 8

keep producing

Question 9

if P is less than AVC you..

Answer 9

shut down

Question 10

If AVC is less than P and less then ATC you…

Answer 10

keep producing despite the loss

Question 11

firms will produce in the short run as long as …

Answer 11

P is greater than AVC

Question 12

output

Answer 12

how much the firm can produce

Question 13

supply

Answer 13

how much the firm will produce

Question 14

what are the 3 reasons why long and short run differ

Answer 14

new firms can enter/old firms can leave, existing firms can change their output level, firms can change their operation (plant) size

Question 15

if competition is legally prohibited

Answer 15

government monopoly

Question 16

if competition is NOT legally prohibited

Answer 16

market monopoly

Question 17

perfect price discrimination

Answer 17

seller charges the highest price that each consumer is willing to pay

Question 18

second degree price discrimination

Answer 18

seller charges one price for a specefic quantity and a lower price for a higher quantity ( buy one get one 50%)

Question 19

third degree price discrimination

Answer 19

seller charges different prices to different segments of the population , if you belong to a certain group ex; veterans, students, seniors

Question 20

“different markets”

Answer 20

seller charges more simply based on where you are ex; Disney, airport, concert, sports venue

Question 21

what are the conditions for price discrimination

Answer 21

seller must have some control over price, can distinguish between buyers ability and willingness to pay, reselling the good must not be possible

Question 22

firm interdependence

Answer 22

decisions made by 1 firm affects the decisions of other firms

Question 23

in the long run …

Answer 23

profits are zero

Question 24

Long run
1-economies of scale

Answer 24

ATC is falling price is also falling

Question 25

Long run
2- constant returns to scale

Answer 25

ATC is flat price is also flat

Question 26

Long run
3- diseconomies of scale

Answer 26

ATC is rising price is also rising

Question 27

concentration ratios

Answer 27

the percent of total sales that are controlled by the top few firms

Question 28

firms produce where

Answer 28

MR=MC