11. Market power: perfect and monopolistic competition

What type of demand curve do the „price-makers” experience?

• Upward-sloping

• Horizontal

• Downward-sloping

• Vertical

What type of market structure is described below?

-Fairly large number of sellers

• - Small firms, relatively to the size of the industry

• - Differentiated products

• - No barriers to entry/exit

• monopolistic competition

• oligopoly

• perfect competition

• monopoly

Firms in perfect competition are:

• Price-makers

• Price-takers

What type of demand curve do price-takers experience?

• Downward-sloping

• Horizontal

• Vertical

• Upward-sloping

Which level of output is the level of profit maximization?

• AC=MC

• MC=MR

• MC=AR

• AR=MR

Select all situations that may happen in the long-run in perfect competition?

• Losses

• Abnormal profits

• Normal profits

What is the point of productive efficiency?

• AR=MR

• MC=AC

• MC=AR

• AC=MR

What is the point of allocative efficiency?

• MC=AR

• AR=MR

• MC=AC

• MR=AC

Is there a market failure in perfect competition?

• Yes, a lot

• Yes, but only some

• Barely any

• No market failure at all

Why is imperfect competition called imperfect?

• It fails to equate MSC and MSB

• There are too little firms

• Products produced are of poor quality

• It fails to maximize profits MC=MR