The model of competitive markets relies on these three core assumptions:1. There must be many buyers and sellers-a few players can't dominate the market.2. Firms must produce an identical product-buyers must regard all sellers' products as eguivalent.3. Firms and resources must be fully mobile, allowing free entry into and exit from the industry.The first two conditions imply that all consumers and firms are price takers. While the third is not necessary for price-taking behavior, assume for thisproblem that a market cannot maintain competition in the long run without free entry.Identify whether or not each of the following scenarios describes a competitive market, along with the correct explanation of why or why not.ScenarioCompetitive?Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only companywith the legal right to publish books in the series in the United States.Yes, meets all assumptionsNo, no free entryIn a major metropolitan area, one chain of coffee shops has gained a large market sharebecause customers feel its coffee tastes better than that of its competitors.No, not many sellersNo, not an identical productIn a small town, there are two providers of broadband Internet access: a cable companyand the phone company. The Internet access offered by both providers is of the samespeed.Dozens of companies produce plain white socks. Consumers regard plain white socks asidentical and don't care who manufactures their socks.

Competitive market structure is also called perfect competition. In long run, firms in perfect…

Scenario Competitive? Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only company with the legal right to publish books in the series in the United States. Yes, meets all assumptions No, no free entry In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than that of its competitors. No, not many sellers No, not an identical product In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.

Scenario Competitive? Scholastik Inc. owns the U.S. copyright to a popular book series. It is the only company with the legal right to publish books in the series in the United States. Yes, meets all assumptions No, no free entry In a major metropolitan area, one chain of coffee shops has gained a large market share because customers feel its coffee tastes better than that of its competitors. No, not many sellers No, not an identical product In a small town, there are two providers of broadband Internet access: a cable company and the phone company. The Internet access offered by both providers is of the same speed. Dozens of companies produce plain white socks. Consumers regard plain white socks as identical and don't care who manufactures their socks.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Order the market structures according to the level of prices you would expect. Then, order them according to the level of quantity you would expect.
What type of market exists when a small number of businesses dominate an industry? oligopoly monopolistic competition monopoly perfect com
Match each concept with its corresponding definition:- Pure and perfect competition. Imperfect competition. The monopoly. The oligopoly. Monopolistic competition. Barriers to entry into an industry. A. All restrictions that do not allow the company to produce a certain type of production. B. A type of market where several companies sell a standardized or differentiated product with limited ability to control prices, having high barriers to enter the market and considerable restrictions on access to the economic information. C. A type of market where many companies produce and sell standardized products, there are no barriers to entry into the industry, one has free access to economic information and none of these companies is powerful to influence (increase or decrease) the market price. D. A type of market in which there are one, several or a considerable number of companies in the industry that control the price level in a certain way; on the other hand, there are barriers to entry…
Most smartphones in the United States use Apple's IOS or Google's Android operating system. What market structure applies to the market for smartphone operating systems? Why?
IATA (the International Air Transport Association) is an example of : Select one: a. Price leadership model. b. Perfectly competitive firms. c. An oligopoly. d. Monopoly.
Since products are differentiated in_____ each firm faces a downward sloping demand curve, and firms have limited market power. a. Monopoly b. Perfect Competion c. Oligopoly d. Monopolistic Competetion e. All of the Above
Explain what the term ‘personal branding’ means. Then discuss how personal branding is developed on an individual level, the different avenues to personal branding, and the impact personal branding can have.
Consider the market of monopolistic competition. Which of the following options is correct in the long run? 500 300 ATC 250 X 200 150 MC MR 150 PRICE (Dollars per scooter) 450 400 350 100 50 0 0 50 100 Demand 200 250 300 350 400 450 QUANTITY (Scooters) 500 Few firms will enter, and few will exit in the long run. More firms will enter the industry in the long run. Neither firm will enter nor exit in the long run. More firms will exit from the industry in the long run.
(a) What are the characteristics of a perfectly competitive market?(b) What are the characteristics of a monopoly market?(c) What are the characteristics of a monopolistically competitive market?(d) What are the characteristics of a oligopoly market?(e) What is the difference between a monopoly and a monopsony? What happens when they meet?Explain.
In which market structure is there a long run positive economic profit? monopoly perfect competition monopolistic competition None of these answers.