Monopoly and Market Structures Quiz

<p>Significant internal economies of scale. (B)</p> Signup and view all the answers

<p>They grant significant market power to a single firm. (C)</p> Signup and view all the answers

<p>Justification for rising prescription prices. (A)</p> Signup and view all the answers

<p>They increase the monopoly power of domestic firms. (D)</p> Signup and view all the answers

<p>Numerous competitors in the same market. (A)</p> Signup and view all the answers

<p>Price-fixing is illegal regardless of intent. (C)</p> Signup and view all the answers

<p>Selling below cost with the intent of driving competitors out of business. (C)</p> Signup and view all the answers

<p>Intent to harm competitors must be explicitly demonstrated. (D)</p> Signup and view all the answers

<p>The Sherman Act (B)</p> Signup and view all the answers

<p>Selling below cost to unload excess inventory. (D)</p> Signup and view all the answers

<p>They often lack legal resources to defend themselves. (C)</p> Signup and view all the answers

<p>They can dominate the market for extended periods. (D)</p> Signup and view all the answers

<p>Music distribution (D)</p> Signup and view all the answers

<p>Evidence is required to show intentional pricing. (D)</p> Signup and view all the answers

<p>Cost-Plus Pricing (B)</p> Signup and view all the answers

<p>Manufacturing Level (A)</p> Signup and view all the answers

<p>Bulk pricing, payment terms, and delivery schedules (C)</p> Signup and view all the answers

<p>Retailers use various strategies to attract consumers. (D)</p> Signup and view all the answers

<p>Matching prices to attract consumers. (A)</p> Signup and view all the answers

<p>Higher expenses could result in higher prices for retailers. (D)</p> Signup and view all the answers

<p>Using slightly lower prices, such as ₱199 instead of ₱200. (D)</p> Signup and view all the answers

<p>To increase sales and attract more customers (C)</p> Signup and view all the answers

<p>₱10 per unit for 500 units and ₱8 per unit for 1,000 units (C)</p> Signup and view all the answers

<p>They prohibit businesses from setting high prices collectively (A)</p> Signup and view all the answers

<p>They ensure that advertisements reflect the true price of products (C)</p> Signup and view all the answers

<p>Overcharging consumers for high-demand items (D)</p> Signup and view all the answers

<p>To ensure consumers are aware of additional costs (C)</p> Signup and view all the answers

<p>Running promotions on weekends or loyalty discounts (D)</p> Signup and view all the answers

<p>By providing lower prices per unit for larger orders (D)</p> Signup and view all the answers

<p>To promote a competitive market benefiting retailers (D)</p> Signup and view all the answers

<p>Pressure on smaller businesses leading to bankruptcy (D)</p> Signup and view all the answers

<p>Better prices and more product options (C)</p> Signup and view all the answers

<p>Balancing competitive pricing with sustainable margins (A)</p> Signup and view all the answers

<p>By ensuring sellers offer the same price terms to customers at the same trade level (D)</p> Signup and view all the answers

<p>It safeguards consumers from hidden costs (D)</p> Signup and view all the answers

<p>Compliance costs associated with pricing legislation (B)</p> Signup and view all the answers

<p>Prevents collusion on prices or limiting market access (D)</p> Signup and view all the answers

<p>The practice of charging different prices to different buyers for goods of like grade and quality (A)</p> Signup and view all the answers

<p>When prices are adjusted in good faith to meet competitive prices (D)</p> Signup and view all the answers

<p>Differential pricing not exceeding cost differences due to varying sales methods or quantities (D)</p> Signup and view all the answers

<p>A seller reducing prices to compete with a larger retailer in a temporary sale (B)</p> Signup and view all the answers

<p>They must be offered on a proportionally equal basis to all buyers distributing the products (A)</p> Signup and view all the answers

<p>Price discrimination can be used if it results in a monopoly (D)</p> Signup and view all the answers

<p>Pricing strategies used to match competitors' prices in good faith (D)</p> Signup and view all the answers

<p>Setting minimum retail prices for all dealers (C)</p> Signup and view all the answers

A situation where a single firm controls the entire market for a particular product or service, giving them immense control over pricing and production.

Legal barriers that make it difficult or impossible for new businesses to enter a market. These can include government licenses, intellectual property rights (like patents and copyrights), and other regulations.

A type of barrier to entry where a single company owns or controls all of a critical resource necessary for production, making it hard for competitors to enter the market.

A situation where the average cost of producing a product decreases as the production volume increases. Large businesses often have an advantage in lowering costs due to their size.

A type of monopoly where a single firm can produce the entire market's demand for a product at a lower cost than multiple firms. This often applies to industries with high fixed costs, like utilities.

The situation when a company's prices are constrained by social and legal issues, such as public perception or government regulations.

The concept that competition among businesses helps to regulate prices and ensure fair market practices.

The potential for unfair pricing practices by monopolies, where they have the ability to charge high prices because customers have few alternatives.

A legal doctrine where the government considers an action illegal regardless of its intent or consequences. For example, price-fixing is always illegal per se, meaning no excuses are accepted.

A legal doctrine that judges the legality of an action based on its intended effect and potential impact on competition.

When companies secretly agree to set prices for goods or services, often at artificially high levels. This is illegal under antitrust laws.

A tactic where a company deliberately sets prices below cost, with the goal of driving competitors out of the market.

A situation where a business sells goods below cost, but the action is justified because they are trying to get rid of surplus inventory or for other legitimate reasons.

The Sherman Act and the Federal Trade Commission Act are laws designed to prevent monopolies and unfair business practices, including predatory pricing.

It is a legal challenge to prove predatory pricing. The accuser must demonstrate that the defendant intended to destroy a competitor and that the low prices were below their average cost.

The practice of using low prices for some products to attract customers, even if it means selling them at a loss. The idea is to entice customers to buy other, more profitable products.

Pricing strategies used by businesses within the same distribution channel level (manufacturers, wholesalers, or retailers), influenced by factors like production costs, competition, and regulations.

The process by which companies determine the prices of their products based on their production costs and desired profit margins.

A pricing strategy where businesses set prices based on what their competitors are charging, especially in highly competitive markets.

The practice of manufacturers setting prices to reflect the cost of producing goods, incorporating factors like raw materials, labor, and overhead expenses.

The practice of wholesalers negotiating prices with manufacturers for bulk purchases and then adding a markup to sell to retailers.

The practice of retailers setting prices to appeal to consumers, often using discounts, loyalty programs, and psychological pricing to attract buyers.

The competitive advantage gained by businesses operating within a specific channel level, often through lower costs, efficient operations, or strong negotiation abilities.

The varying price points offered by different businesses within each channel level, influenced by factors like cost structure, market dynamics, and competitive strategies.

Companies secretly agree to set high prices together, limiting consumer choices and leading to higher costs.

Laws and regulations preventing businesses from colluding to artificially inflate prices and harm consumers.

A type of pricing strategy where discounts are offered for purchasing larger quantities of a product.

Temporary reductions in price, often used to boost sales and attract customers.

Government-set guidelines for the suggested retail prices of certain goods, especially essential items.

Regulations requiring businesses to clearly display prices, including taxes and fees, so consumers can make informed buying decisions.

Pricing practices that are designed to deceive consumers, often involving misleading discounts or hidden fees.

Government regulations protecting consumers from unfair and deceptive pricing practices at the retail level.

Policies designed to prevent wholesalers from working together to set minimum prices. This encourages competition, benefiting retailers and ultimately, consumers.

The practice of offering different prices to different customers at the same level of trade, which is illegal under the Robinson-Patman Act in order to ensure fair competition.

The practice of continuously lowering prices to attract customers, which can be harmful to profitability and even force smaller businesses out of the market.

The need for businesses within a distribution level to balance competitive pricing with maintaining sufficient profit margins.

The practice of transparency in pricing, meaning that consumers have access to accurate information about product costs and any promotions.

The additional costs involved for retailers and wholesalers in implementing and adhering to pricing legislation.

The act of manufacturers offering different prices based on a variety of factors like production costs, target market preferences, and brand positioning.

A defense in price discrimination cases where the seller can justify different prices by proving that the cost of manufacturing, selling, or delivering to different customers varies due to differing quantities or methods.

A defense in price discrimination cases where the seller can justify different prices by demonstrating that the price differences are temporary, localized, and used defensively to match competitors' prices.

Promotional allowances, such as discounts or advertising funds, must be offered to all buyers proportionally based on their distribution of the seller's products.

A manufacturer cannot force its dealers to sell its products at a specific retail price.

The Clayton Act, amended by the Robinson-Patman Act, prohibits price discrimination, but only those that substantially lessen competition or create a monopoly.

The use of dynamic pricing policies, where prices are adjusted based on factors like demand or time, is often subject to scrutiny under the rule of reason in price discrimination cases.