Suppose that the market for computers is dominated by a single firm, like IBM, that is able to exert influence over prices and output. This situation violates the perfect competition assumption of* many buyers and sellers. identical or homogeneous goods. ease of entry and exit. no differentiation.
Suppose that the market for computers is dominated by a single firm, like IBM, that is able to exert influence over prices and output. This situation violates the
many buyers and sellers.
identical or homogeneous goods.
ease of entry and exit.
no differentiation.
City hotels and restaurants are illustrative of*
pure competition.
oligopoly.
This characteristic of oligopoly implies that there is interdependence among firms that leads to conflicting motives, that leads them to act and react on the
lack of uniformity
competition
no unique patter of pricing behavior
interdependence
The actions of a firm in a purely competitive industry have no effect on market price; therefore, the demand curve faced by the firm is*
unknown.
a downward-sloping curve.
a horizontal line at the level of the market price.
a firm’s total revenue curve.
A competitor maximizes profit by producing the output that*
equates price and
equates TR and TC.
equates MR and MC.
maximizes the difference between MR and MC.
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