True or False 31. Technical superiority can be a source of entry barriers. ____
ID: 1125702 • Letter: T
Question
True or False
31. Technical superiority can be a source of entry barriers.
____ 32. The marginal revenue curve for a monopolist is always below the demand curve.
____ 33. Adam Smith believed that monopoly is the most efficient market structure.
____ 34. In the long-run, a monopolist charges the same price as a perfectly competitive firm.
____ 35. Inefficient resource allocation is a major problem with monopolies.
____ 36. Since a monopolist has a unique product, it makes no sense for the firm to advertise.
____ 37. A monopoly firm always devotes some of its profits to research.
____ 38. The difference in prices for first-class and coach airline tickets exemplifies price discrimination.
____ 39. Economists consider price discrimination to always be undesirable.
____ 40. Price discrimination leads to higher prices for all consumers.
____ 41. Under monopolistic competition, profits cannot persist because new firms will be attracted to the market.
____ 42. In the long run, a monopolistically competitive firm earns small economic profits.
____ 43. Oligopolists behave independently of each other.
____ 44. Oligopolies are difficult to analyze because of the interdependent nature of management decisions.
____ 45. Economists place cartels among the least-desirable forms of market organization.
____ 46. Price leadership is an example of explicit collusion by oligopolies.
____ 47. Sales maximization and profit maximization are essentially equivalent.
____ 48. Sticky prices are a direct result of the kinked demand curve.
____ 49. The kinked demand curve model is based on the assumption that rival firms will match a price cut but ignore a price increase.
____ 50. Game theory is based on the idea that each participant makes decisions based on how she believes the competition will react.
Explanation / Answer
Answer:-
31.True.If a country is superior in producing quality goods at lower prices they will definately try to trap developing countries market.So local companies of that company will face a stiff competion from the foreign countries.so this can be a barrier.
32.True.In monopolist you have no direct competition.You can set any price you want and demand curve for good or service will tell how much is the sell.if you want to sell more you have to drop price or provide some kind of rebate coupan discount.if you increase price you will sell less hence marginal revenue curve is below demand curve.
33.True.Monopolies that persist are indeed detrimental to consumers as those producers have less incentive to discover new production processes at lower cost.Therefore lowering price means gaining market share.Monopolies tend to persist are those that are given sanction and protection by government like licensing law, custom duties.
34.False.In long run a monopolist can charge diffrent prices for the same perticular product since he has no competition in market.where as if a customer in perfect competition may go for diffrent firm because of there low prices.
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