Economic Concepts: Industry Profit and Homogeneous Product
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Questions and Answers

Which concept refers to the quantity of a good that is desired by buyers?

  • Quantity supplied
  • Quantity demanded
  • Demand (correct)
  • Supply
  • What does the term 'quantity demanded' specifically refer to?

  • Demand
  • Quantity demanded (correct)
  • Supply
  • Quantity supplied
  • What does the total quantity of a product or service that the marketplace can offer represent?

  • Supply (correct)
  • Quantity demanded
  • Quantity supplied
  • Demand
  • Which term defines the amount of a product/service that suppliers are willing to provide at a given price?

    <p>Supply</p> Signup and view all the answers

    What economic concept demonstrates the relationship between quantity sold and price?

    <p>Law of Demand</p> Signup and view all the answers

    Which principle states that as the price increases, the quantity demanded decreases?

    <p>Law of Demand</p> Signup and view all the answers

    What market structure is characterized by a single seller?

    <p>Monopoly</p> Signup and view all the answers

    In a monopsony market, the influence on market structure is due to:

    <p>Nature of buyers</p> Signup and view all the answers

    Which market structure is characterized by close substitutes and product differentiation?

    <p>Monopolistic competition</p> Signup and view all the answers

    What type of market structure involves two buyers acting jointly in the market?

    <p>Duopoly</p> Signup and view all the answers

    In which market structure are entry and exit conditions influenced by profitability or loss?

    <p>Perfect competition</p> Signup and view all the answers

    What type of market structure has products with no close substitutes?

    <p>Monopoly</p> Signup and view all the answers

    What happens when an industry earns excess profits?

    <p>New firms enter the industry</p> Signup and view all the answers

    Why can't a seller raise the price of a homogeneous product?

    <p>Customers will buy from other sellers at a lower price</p> Signup and view all the answers

    What does a perfectly elastic average revenue curve signify for a firm?

    <p>The firm has no control over the market price</p> Signup and view all the answers

    How do buyers and sellers interact in a market with absence of artificial restrictions?

    <p>Buyers and sellers have freedom to transact with any party</p> Signup and view all the answers

    What effect does the presence of perfect substitutes have on the sellers' products?

    <p>Makes buyers indifferent between sellers</p> Signup and view all the answers

    Why does the number of sellers being very large prevent any individual seller from influencing the price?

    <p>As there are many alternatives available for buyers</p> Signup and view all the answers

    What distinguishes firms under monopolistic competition?

    <p>Each firm produces a distinct product.</p> Signup and view all the answers

    What are considered as selling costs under monopolistic competition?

    <p>Expenses on salesman, allowances to sellers for window displays</p> Signup and view all the answers

    How can a firm in monopolistic competition increase sales and profits without reducing the price?

    <p>By changing product quality, packaging, etc.</p> Signup and view all the answers

    What is the term used by Chamberlin to describe firms producing closely related products?

    <p>Product groups</p> Signup and view all the answers

    What is the significant role acknowledged by the Philippine government regarding small and medium enterprises?

    <p>Important role in economic and social development</p> Signup and view all the answers

    What do SMEs encompass according to the text?

    <p>Small, medium, and micro enterprises</p> Signup and view all the answers

    In a monopoly market, what is the main characteristic of the product?

    <p>Low cross elasticity of demand with other products</p> Signup and view all the answers

    What does it mean when it is stated that 'a monopolist has full control on the supply of a product'?

    <p>The monopolist can manipulate the quantity supplied to influence prices</p> Signup and view all the answers

    What distinguishes a monopoly from perfect competition in terms of production costs?

    <p>Monopolies have higher production costs due to lack of competition</p> Signup and view all the answers

    Why do selling costs not arise in a perfectly competitive market?

    <p>Firms in perfect competition do not need to advertise or promote their products</p> Signup and view all the answers

    How does transport cost affect the price of a homogeneous commodity?

    <p>Transport cost can lead to different prices based on the place of supply</p> Signup and view all the answers

    What is a key feature distinguishing monopoly from perfect competition regarding the number of sellers?

    <p>Monopoly has one seller while perfect competition has several competing firms</p> Signup and view all the answers

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