B5-M4 Flashcards
1
Q
Firms will operate best when:
A
Marginal revenue= Marginal cost
-ignoring fixed and sunk costs
2
Q
Natural monopoly
A
Economic and technical conditions permit only one efficient supplier
3
Q
Monopolistic competition
A
- numerous firms with differenciated products
- few barriers to entry
- firms exact some influence over price and market
- non price competition is frequent and critical
4
Q
Perfect/ Pure competition
A
- large # of suppliers
- customers act independently
- little product differentiation
- no barriers to entry
- inability of market participants to influence market prices
5
Q
Oligopoly
A
- significant barrier to entry
- few firms in the market
- differentiated product
- fixed prices
- kinked demand curve
6
Q
Monopoly
A
- insurmountable barriers
- price setters (and output)
- no substitute products
- demand inelastic
- long run positive profits
