SCP2

Which of the following best describes the SCP paradigm?

• A framework that focuses only on firm profitability

• A model explaining how market structure influences firm behavior and economic outcomes

• A theory that assumes all firms behave identically regardless of market conditions

• A marketing strategy for improving customer engagement

In the SCP paradigm, what does “market structure” primarily refer to?

• The financial position of firms in an industry

• The way firms conduct their advertising campaigns

• The number and size distribution of firms in a market, entry barriers, and product differentiation

• The internal hierarchy of an organization

How does a high concentration ratio in an industry typically affect competition?

• It increases competition by allowing more firms to enter the market

• It reduces competition, leading to potential monopolistic or oligopolistic behavior

• It has no impact on competition

• It makes firms more likely to price their products below cost

Which of the following is NOT considered part of “firm conduct” in the SCP paradigm?

• Pricing strategies

• Mergers and acquisitions

• Advertising campaigns

• The number of firms in an industry

In which type of market structure do firms have the most pricing power?

• Perfect competition

• Monopolistic competition

• Oligopoly

• Monopoly

What role do barriers to entry play in market structure?

• They encourage more firms to enter the market

• They make it easier for new firms to compete with established ones

• They prevent or limit new firms from entering the market, reinforcing existing structures

• They have no impact on market structure

Which of the following industries is most likely to be analyzed using the SCP paradigm?

• A highly competitive online marketplace

• A government agency

• A local non-profit organization

• A personal blog

Which factor is most likely to affect a firm’s conduct within a market structure?

• The firm’s internal HR policies

• The number of competitors and their market power

• The color of a firm’s logo

• The number of employees in the firm

In which type of market structure do firms engage in strategic interdependence, meaning the actions of one firm significantly affect its competitors?

• Perfect competition

• Monopoly

• Oligolopy

• Monopolistic competition

How do firms in monopolistic competition differentiate their products?

• By setting high prices without competition

• By producing completely unique products

• Through branding, quality, and slight variations in features

• By preventing new firms from entering the market