20. A firm such as a public utility, which is the sole producer in a market in w
ID: 1165566 • Letter: 2
Question
20. A firm such as a public utility, which is the sole producer in a market in which government determines prices and standards of service, is known as a a. local monopoly. b. natural monopoly e. regulated monopoly d. oligopoly. e. monopolistically competitive firm. 21. Which of the following statements is true? a. A perfectly competitive firm's demand curve is the market-demand curve. b. For a monopolist, the demand curve is perfectly elastic. c. For a monopolist, the law of demand generally does not apply because it is the only firm in a market. d. A monopolist's demand curve is the market-demand curve. e. There are more firms in a monopoly market compared with perfect competition. 22. Which of the following is not a characteristic of firms in a monopolistically competitive market? a. Existence of large economies of scale b. Advertising Nonprice competition d. c. Ease of entry and exit e. Differentiated products 23. What characteristic is unique to oligopolistic firms? a. Barriers to entry in the market b. c. d. e. Interdependence of firms Homogeneous products Economic profits can exist in the long run. Economic profits can exist in the short run. 24. When a cartel is successful, a. it offers consumers the lowest possible prices b. it minimizes profits for its members c. it behaves as a monopolist in the market d. it has no effective mechanism for enforcing agreements. e. itwill always be stable. 25. National income accounting can best be characterized as a. a set of rules to summarize economic activity over a given period of time. a system for comparing different political systems. c. a microeconomic model used by the Federal Reserve. d. a statistical measure of the income received by consumers as opposed to businesses e. a standardized economic report written by politicians. b.Explanation / Answer
20. (c) Regulated Monopoly
21. (a) A perfectly competitve firm's demand curve is market demand curve
22. (c) Non Price Competition
23. (e) Economic Profits can exist in short run.
24 (c) It behaves as monopolist in the market
25 (a) a set of rules to summerise economic activity over a given period of time.
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