Question :
61) One problem with measures of market concentrations that they : 1241311
61) One problem with measures of market concentrations is that they do not
A) account for barriers to entry.
B) allow for all market types.
C) account for the difficulty in collecting total revenue data.
D) create meaningful comparisons across industries.
E) accurately measure concentration in markets with fewer than 4 firms.
62) In monopolistic competition there
A) are many firms and many buyers.
B) are several large firms.
C) is one large firm.
D) might be many, several, or one firm.
E) are many firms but only a few buyers.
63) A firm in monopolistic competition has a ________ market share and ________ influence the price of its good or service.
A) large; can
B) large; cannot
C) small; can
D) small; cannot
E) large; might be able to
64) Product differentiation means
A) making a product that has perfect substitutes.
B) making a product that is entirely unique.
C) the inability to set your own price.
D) making a product that is slightly different from products of competing firms.
E) making your demand curve horizontal.
65) Firms in monopolistic competition compete on
i.quality.
ii.price.
iii.marketing.
A) i and ii
B) ii only
C) ii and iii
D) i and iii
E) i, ii, and iii
66) A firm in monopolistic competition has ________ demand curve.
A) a downward sloping
B) an upward sloping
C) a vertical
D) a horizontal
E) a U-shaped
67) The absence of barriers to entry in monopolistic competition means that in the long run firms
A) make an economic profit.
B) make zero economic profit.
C) incur an economic loss.
D) make either an economic profit or zero economic profit.
E) make either zero economic profit or incur an economic loss.
68) If the four-firm concentration ratio for the market for pizza is 28 percent, then this industry is best characterized as
A) a monopoly.
B) monopolistic competition.
C) an oligopoly.
D) perfect competition.
E) oligopolistic competition.
69) Each of the ten firms in an industry has 10 percent of the industry’s total revenue. The four-firm concentration ratio is
A) 80.
B) 100.
C) 1,000.
D) 40.
E) 10.
70) Each of the four firms in an industry has a market share of 25 percent. The Herfindahl-Hirschman Index equals
A) 3,600.
B) 100.
C) 625.
D) 25.
E) 2,500.
71) The larger the four-firm concentration ratio, the ________ competition within an industry; the larger the Herfindahl-Hirschman Index, the ________ competition within an industry.
A) more; more
B) more; less
C) less; more
D) less; less
E) The premise of the question is wrong because the four-firm concentration ratio applies only to markets with four firms in it and these markets are, by definition, not competitive.
72) Girlfriend’s Salon is the only hair salon in Sunnyvale, a small town. Which of the following statements correctly describes a concentration measure for salons in Sunnyvale?
A) The measure would incorrectly show an uncompetitive market structure because many firms could open in Sunnyvale without any restrictions.
B) The measure would incorrectly show an uncompetitive market because the measure does not reflect the low prices charged at Girlfriend’s Salon.
C) The measure would correctly show a monopoly exists in town because there are so few residents.
D) The measure would correctly show a monopoly exists because Girlfriend’s revenues are low.
E) The measure would incorrectly show a perfectly competitive market exists because new salons can open and compete with Girlfriend’s.
