325 If a local California avocado stand operates in a perfectly competitive market that stand owner will be a price maker Incorrect price taker True Answer Correct price discriminator Incorrect price maximizer Incorrect 326 If all firms in an industry are price takers then each firm can sell at the price it wants to charge provided it is not too different from the prices other firms are charging Incorrect each firm takes the market price as given for its current output level recognizing that the price will change if it alters its output significantly Incorrect an individual firm cannot alter the market price even if it doubles its output True Answer Correct the market sets the price and each firm can take it or leave it by setting a different price Incorrect 327 The assumptions of perfect competition imply that individuals in the market accept the market price as given True Answer Correct individuals can influence the market price Incorrect the price will be fair Incorrect the price will be low Incorrect 328 Price takers are individuals in a market who select a price from a wide range of alternatives Incorrect select the lowest price available in a competitive market Incorrect select the average of prices available in a competitive market Incorrect have no ability to affect the price of a good in a market True Answer Correct 329 330 331 Individuals in a market who must take the market price as given are quantity minimizers Incorrect quantity takers Incorrect price takers True Answer Correct price searchers Incorrect Perfect competition is characterized by rivalry in advertising Incorrect fierce quality competition Incorrect the inability of any one firm to influence price True Answer Correct widely recognized brands Incorrect When a firm cannot affect the market price of the good that it sells it is said to be a price taker True Answer Correct natural monopoly Incorrect dominant firm Incorrect cartel Incorrect 332 The assumptions of perfect competition imply that individuals in the market determine the market price Incorrect firms in the market accept the market price as given True Answer Correct there will be no new competition due to natural monopolies Incorrect the price will be decreasing yearly Incorrect 333 In the model of perfect competition the consumer is at the mercy of powerful firms that can set prices wherever they prefer Incorrect individual firms can influence the price but only slightly Incorrect no individual or firm has enough power to have any impact on price True Answer Correct 334 335 336 337 338 the price is determined by how many years are left in the product s patent Incorrect Perfect competition is characterized by rivalry in advertising Incorrect fierce quality competition Incorrect the inability of any one firm to influence price True Answer Correct widely recognized brands Incorrect A perfectly competitive firm is a price taker True Answer Correct price searcher Incorrect cost maximizer Incorrect quantity taker Incorrect If a Florida strawberry wholesaler operates in a perfectly competitive market that wholesaler will have a share of the market and consumers will consider her strawberries to be Therefore advertising will take place in this market large standardized no Incorrect small standardized little if any True Answer Correct small differentiated no Incorrect large differentiated extensive Incorrect One characteristic of a perfectly competitive market is that there are sellers of the good or service one or two Incorrect a few Incorrect usually fewer than 10 Incorrect many True Answer Correct Which of the following is not a characteristic of a perfectly competitive industry Firms seek to maximize profits Incorrect Profits may be positive in the short run Incorrect There are many firms Incorrect There are differentiated products True Answer Correct 339 In a perfectly competitive industry each firm is a price maker Incorrect produces about half of the total industry output Incorrect produces a differentiated product Incorrect produces a standardized product True Answer Correct For the Colorado beef industry to be classified as perfectly competitive ranchers in Colorado must have on prices and beef must be a product no noticeable effect standardized True Answer Correct a huge effect standardized Incorrect a huge effect differentiated Incorrect no noticeable effect differentiated Incorrect Which of the following is a necessary condition for perfect competition A small number of firms control a large share of the total market Incorrect Movement into and out of the market is limited Incorrect Firms produce a standardized product True Answer Correct Extensive advertising is used to promote the firm s product Incorrect All except one of the following are characteristics of perfect competition Which is the exception All firms produce the same standardized product Incorrect There are many producers and each has only a small market share Incorrect There are many producers one firm has a 25 market share and all of the remaining firms have a market share of less than 2 each True Answer Correct There are no obstacles to entry into or exit from the industry Incorrect The perfectly competitive model assumes all of the following except a great number of buyers Incorrect 340 341 342 343 344 345 346 347 easy entry into and easy exit from the market Incorrect complete information on the part of buyers and sellers Incorrect that firms attempt to maximize their total revenue True Answer Correct The market for breakfast cereal contains hundreds of similar products such as Froot Loops corn flakes and Rice Krispies that are considered to be different products by different buyers This situation violates the perfect competition assumption of many buyers and sellers Incorrect a standardized product True Answer Correct complete information Incorrect ease of entry and exit Incorrect An assumption of the model of perfect competition is discrimination Incorrect difficult entry and exit Incorrect many buyers and sellers True Answer Correct limited information Incorrect The competitive model assumes all of the following except a large number of buyers Incorrect easy entry into and easy exit from the market Incorrect standardized product Incorrect patents and copyrights True Answer Correct almost always take the market price as given or are considered but this is often not true of Consumers quantity minimizers producers Incorrect Producers quantity takers consumers Incorrect
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