Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 10, Problem 2MC
To determine
Attractive industry.
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a source of market power that exists due to falling long run average total cost is
a. Trade barriers
b. Advertising
c. Product differentiation
d. Economies of scale
e. Patents and copyrights
In any industry, what motivates potential rivals to enter the market?
a.average profit
b.high profits
c.low profits
d.profits
Government regulations related to competition in the industry helps to clearly establish a line between fair and unfair practices thereby promotive healthy competition. How can prove it?
Chapter 10 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
- 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…arrow_forwardFirm A takes action to make there production process more efficient. Why will this make it easier for Firm A to compete better with competitors who are discount firms.arrow_forwardTrue/False In Perfect competition market, differentiated goods are sold.arrow_forward
- Choose a product or service that you are familiar with (something you use or have used, something related to a job you or someone close to you has held, etc.). Are there a lot or few firms in the industry? Are the products similar or identical or without close substitutes? Are there barriers to entry and, if so, what are they?arrow_forward“Florida orange growers” advertise as a group, but individual orange growers do not. What does this fact suggest about the market for oranges? Why?arrow_forwardWhich of the below is FALSE under perfect competition in the long-run? A. there is no producer surplus. B. the industry supply curve is flat at the minimum long-run average cost. C. mergers occur until only few firms dominate the market. D. competition leaves suppliers with a normal profit but no more. E. consumers get all of the surplus in the market.arrow_forward
- Firms that has no significant barriers to entry Select one: a. none b. monopoly c. perfect competition d. monopolistic competitionarrow_forwardThe size of a firm is more important than market share in determining market power for an industry or product. A. True B. Falsearrow_forwardThere are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through a.economies of scale b.government protection c.control of an important input . b. ABC’s market power a.does b.does not guarantee that the firm makes an economic profit.arrow_forward
- (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.arrow_forwardIn perfect competition there are no barriers to entry for firms. Which of the following would be a low barrier to entry? 1.it is difficult to obtain resources to produce the product. 2.profits in the marketplace must be zero. 3. fixed costs of production are relatively low. 4.marginal revenues from selling goods are relatively high.arrow_forwardWhich market structure shown below would be expected to maximize consumer surplus? A. Monopoly B. Oligopoly C. Perfectly Competitivearrow_forward
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