Where you are and end up
quantity supplied is equal to quantity demanded
equilibrium
What is a money value of an object as determined by supply and demand?
price
What is the name of a market structure with many sellers each selling identical products?
Perfect competition
Each buyer and seller act independently
Buyers and sellers are reasonably well informed about the products and prices
Easy entry and easy exit to the industry
characteristics of perfect competition
What is the nature and degree of competition among firms in the same industry?
Market structure
What is an agreement among firms to sell at the same or similar prices?
Price fixing
Which market structures have strong market power?
Monopoly and oligopoly
For question 1, what happens at a price of $10
shortage of 200 t-shirts
What occurs when the demand curve shifts to the right?
price increases and quantity increases
What is trading goods and services for each other instead of using money to purchase items?
barter
What is a market structure where there is a single seller of the product largely due to barriers to entry?
Monopoly
What is it called when competitors keep prices low to try to win business from each other?
A price war
What are market structures that fail to meet the conditions of perfect competition?
Imperfect competition
What is an agreement among producers on prices?
Cartel
If you go to a restaurant and showing your military id allows you to pay a cheaper price to eat a meal than many other customers, this is a legal example of:
Price discrimination
For question 2, what happens at a price of $30
Equilibrium at 200 t-shirts
quantity demanded is greater than quantity supplied because price is too low.
shortage
What is selling items in unofficial markets to get around government regulations.
black market
If Pepsi and Coke are the two leading firms that dominate the soft drink industry, then the soft drink industry is considered a(n)
Oligopoly
What are factors that make it difficult for new firms to enter a market such as high startup costs and complex technology?
Barriers to entry
What are characteristics that allow average cost to decrease as production increases?
Economies of scale
Which of the following is a cartel of oil producing nations?
OPEC
What is a price floor and what does it cause?
a minimum price charged for a product, which usually creates a surplus.
For question 3, what happens at a price of $50
Surplus of 200 t-shirts
What occurs when the supply curve shifts to the left?
price increases and quantity decreases
What is the name for any point where quantity supplied and quantity demanded are not equal?
disequilibrium
If the industry for pants has a lot of sellers, each with similar products with sellers who each have some control over prices, then the pants industry is considered
Monopolistic competition
What are ways other than the price that businesses compete against each other such as physical characteristics, location, service, and advertising?
Non-price competition
What is the ability to control prices and market output?
market power
What is temporarily setting prices low to try to drive competitors out of business?
Predatory pricing
What did the Clayton Antitrust Act in 1914 do?
Outlawed a lot of price discrimination
For question 4, what is the quantity supplied and quantity demanded at the price ceiling of $20
quantity supplied is 100 t-shirts and quantity demanded is 300 t-shirts
What occurs when the demand curve shifts to the left?
price decreases and quantity decreases
What is a sudden shortage of a good or service, often due to weather or war?
supply shock
Because the federal government only allows the U.S. Postal Service to deliver mail to people, then the reason for the monopoly of the U.S. Postal Service is:
Government monopoly
How has the government allowed competition in some industries that used to be monopolies?
Through deregulation by the government, reducing rules that business must follow on companies that were monopolies before competition was allowed.
What is a contract that allows a single firm to sell goods in a market, often under a brand name?
Franchise
What is an agreement (illegal in the United States) for business who are supposed to be competing to agree to both set higher prices or to reduce output for higher total profits.
Collusion
What price does a monopoly tend to charge and what level of output do they tend to produce?
They tend to charge the price and produce the level of output that maximizes total revenue if unregulated
For question 5, what is the result of the price ceiling of $20
Shortage of 200 t-shirts
quantity supplied is greater than quantity demanded because price is too high.
surplus
What is lacking production incentives a disadvantage of?
rationing
If there is only one grocery store in a small town because the town is too small for more than one grocery store to make any profits, then the reason for the monopoly is:
Geographical monopoly
What are products being somewhat different from each other to allow consumers to use tastes and preferences as a factor?
Differentiation
What is the combination of two or more businesses into one firm?
Merger
What company was split up by antitrust laws by the U.S. Government in 1911?
Standard Oil Company
What is a price ceiling and what does it cause?
a maximum price charged for a product, which usually creates a shortage.
For question 6, what is the quantity supplied and quantity demanded at the price floor of $40
quantity supplied is 250 t-shirts and quantity demanded is 150 t-shirts
What occurs when the supply curve shifts to the right?
price decreases and quantity increases
Are flexible and easy to change
Are something people are familiar with
Have no costs of administration
advantages of prices
If a business has fixed costs so large that if there was more than one firm, all firms would go bankrupt due to the massive fixed costs (like a power company), then the reason for the monopoly is:
Natural monopoly
What does the government provide to allow a company to be the only producer of a product for a certain length of time, usually because that company invented that product?
A patent
No question
No answer
What are laws the federal government enforces to try to make sure that no large business is using their market power illegally?
Antitrust
Which earlier act in 1890 tried to “protect trade and commerce against unlawful restraint and monopoly”?
Sherman Act
For question 7, what is the result of the price floor of $40
Surplus of 100 t-shirts