For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Scenario A large city has lots of small shops where people can buy sweaters. Each store's sweaters reflect the style of that particular store. Additionally, some stores use higher-quality yarn than others, which is reflected in their price. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care about who sells them their socks. The technology for producing socks is widely known, and any reputable person who wanted to start a sock manufacturing business could obtain a loan from a bank to buy the necessary machinery. Only three airlines fly from San Francisco to Medford, Oregon. No new airline will enter this market, because there are not enough customers to share among four or more airlines without each one experiencing substantially higher average costs. Consumers view all airlines as providing basically the same service and will shop around for the lowest price. The government has granted a patent to a drug company for an experimental AIDS drug. That company is the only firm permitted to sell the drug. Number of Firms ▸ Type of Product Market Model
For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching entry for each dropdown box in the following table. Scenario A large city has lots of small shops where people can buy sweaters. Each store's sweaters reflect the style of that particular store. Additionally, some stores use higher-quality yarn than others, which is reflected in their price. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care about who sells them their socks. The technology for producing socks is widely known, and any reputable person who wanted to start a sock manufacturing business could obtain a loan from a bank to buy the necessary machinery. Only three airlines fly from San Francisco to Medford, Oregon. No new airline will enter this market, because there are not enough customers to share among four or more airlines without each one experiencing substantially higher average costs. Consumers view all airlines as providing basically the same service and will shop around for the lowest price. The government has granted a patent to a drug company for an experimental AIDS drug. That company is the only firm permitted to sell the drug. Number of Firms ▸ Type of Product Market Model
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:2. Market structures
For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model. Select the matching
entry for each dropdown box in the following table.
Scenario
A large city has lots of small shops where people can buy
sweaters. Each store's sweaters reflect the style of that particular
store. Additionally, some stores use higher-quality yarn than
others, which is reflected in their price.
Dozens of companies produce plain white socks. Consumers
regard plain white socks as identical and don't care about who
sells them their socks. The technology for producing socks is
widely known, and any reputable person who wanted to start a
sock manufacturing business could obtain a loan from a bank to
buy the necessary machinery.
Only three airlines fly from San Francisco to Medford, Oregon. No
new airline will enter this market, because there are not enough
customers to share among four or more airlines without each one
experiencing substantially higher average costs. Consumers view
all airlines as providing basically the same service and will shop
around for the lowest price.
The government has granted a patent to a drug company for an
experimental AIDS drug. That company is the only firm permitted
to sell the drug.
Number of
Firms
Type of Product
Market Model
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