Question : 15.1   A Firm’s Profit-Maximizing Choices 1) A market with a large : 1226167

15.1   A Firm’s Profit-Maximizing Choices

1) A market with a large number of sellers

A) can only be a perfectly competitive market.

B) might be an oligopoly or a perfectly competitive market.

C) might be a monopolistically competitive or a perfectly competitive market.

D) might be a perfectly competitive, monopolistically competitive, oligopoly, or monopoly market.

E) can only be a monopolistically competitive market.

2) What is the difference between perfect competition and monopolistic competition?

A) Perfect competition has a large number of small firms while monopolistic competition does not.

B) Perfect competition has barriers to entry while monopolistic competition does not.

C) Perfect competition has no barriers to entry, while monopolistic competition does.

D) In perfect competition, firms produce identical goods, while in monopolistic competition, firms produce slightly different goods.

E) In monopolistic competition, firms produce identical goods, while in perfect competition, firms produce slightly different goods.

3) A perfectly competitive firm

A) sells a product that has perfect substitutes.

B) has a perfectly inelastic demand.

C) has a perfectly elastic supply.

D) Answers A and B are correct.

E) Answers A and C are correct.

4) In which market structure do firms exist in very large numbers, each firm produces an identical product, and there is freedom of entry and exit?

A) monopoly

B) oligopoly

C) only perfect competition

D) only monopolistic competition

E) both perfect competition and monopolistic competition

5) The characteristics that describe a perfectly competitive industry include

A) many firms selling an identical product.

B) one firm selling to many buyers.

C) many firms selling a slightly differentiated product.

D) a few firms selling to many buyers.

E) None of the above answers is correct.

6) In part, perfect competition arises if

i.each firm’s minimum efficient scale is large relative to demand.

ii.each firm produces a good or service identical to those produced by its many competitors.

iii.there are significant barriers to entry.

A) i only

B) ii only

C) i and ii

D) iii only

E) ii and iii

7) In which of the following market types do all firms sell products so identical that buyers do not care from which firm they buy?

A) perfect competition

B) monopolistic competition

C) oligopoly

D) monopoly

E) perfect competition and monopolistic competition

8) Each firm in a perfectly competitive industry

A) produces a good that is slightly different from that of the other firms.

B) produces a good that is identical to that of the other firms.

C) attains economies of scale so that its efficient size is large compared to the market as a whole.

D) has control over at least one unique resource to separate themselves from their competitors.

E) has an important influence on the market price of the good or service being produced.

9) A market in which many firms sell identical products is

A) a monopoly.

B) an oligopoly.

C) only perfectly competition.

D) only monopolistic competition.

E) both perfect competition and monopolistic competition.

10) One requirement for an industry to be perfectly competitive is that in the industry there

A) are a few firms who control the market.

B) are many firms for whom the efficient scale of production is small.

C) is one firm that sells a product with no close substitutes.

D) are many firms selling different products.

E) is a barrier to entry that makes the entry of new firms difficult.