Which of the following is a characteristic of a monopolistic competition?
Which of the following is a characteristic of a monopolistic competition?
Monopolistic competition is a market structure defined by four main characteristics: large numbers of buyers and sellers; perfect information; low entry and exit barriers; similar but differentiated goods.
Which of the following is a unique feature of oligopoly?
The distinctive feature of an oligopoly is interdependence. Oligopolies are typically composed of a few large firms. Each firm is so large that its actions affect market conditions. Therefore, the competing firms will be aware of a firm’s market actions and will respond appropriately.
Which of the following best describes a pure monopoly?
Which of the following best describes a pure monopoly? One firm selling a single unique product, where entry of additional firms is blocked and product differentiation is not a issue.
What industry is monopolistic competition most likely to be found?
Final Exam Spring 2014
| Question | Answer |
|---|---|
| In which industry is monopolistic competition most likely to be found? | Retain trade. |
| The goal of product differentiation and advertising in monopolistic competition is to make? | Price less of a factor and product differences more of a factor in consumer purchases. |
Which industry would be the best example of an oligopoly?
Oligopoly arises when a small number of large firms have all or most of the sales in an industry. Examples of oligopoly abound and include the auto industry, cable television, and commercial air travel. Oligopolistic firms are like cats in a bag.
When an Oligopolist is in long run equilibrium?
In the long run, economic profits are equal to zero, so there is no incentive for entry or exit in the long run. Each firm is earning exactly what it is worth, the opportunity costs of all resources. In long run equilibrium, profits are zero (πLR = 0), and price equals the minimum average cost point (P = min AC = MC).
Which industries are oligopolies?
Industries With Potential Oligopolies. Throughout history, there have been oligopolies in many different industries, including steel manufacturing, oil, railroads, tire manufacturing, grocery store chains, and wireless carriers. Other industries with an oligopoly structure are airlines and pharmaceuticals.
What is perfect competition in economics?
In economic theory, perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barrier, buyers have “perfect” or full information, and companies cannot determine prices.
What is the market structure of Starbucks?
Starbucks, a U.S based firm that has majored in the coffee industry, is considered an oligopoly. An oligopoly is a market structure containing a small number of dominant firms but doesn’t substantially influence their competitors.
What type of market structure is a coffee shop?
Monopolistic Competition