Microecon Week 10

Question 1

Under perfect competition, what is the theoretical ideal?

Answer 1

• Free entry and exit of the market

- Many tiny firms

Question 2

Under a monopoly, what is the theoretical idea?

Answer 2

• Single firm
• Barriers to entry
• Can set the market price

Question 3

Patents/copyrights, exclusive franchises/licenses and government support for a firm (nationalisation) are all example of what?

Answer 3

Legal barriers to entry

Question 4

The practise of firms offering different prices to different consumers for the same product is known as?

Answer 4

Price discrimination

Question 5

Offering a single price for a good for all consumers is known as? (An alternative to price discrimination)

Answer 5

Uniform pricing

Question 6

What is first degree price discrimination?

Answer 6

Individual based price discrimination

Question 7

What is second degree price discrimination?

Answer 7

Self-selection: differentiates prices based on quality and quantity

Question 8

What is third degree price discrimination?

Answer 8

Group-based price discrimination