Regulation/ Deregulation
Monopolistic Competition
Oligopolies
Chapter 6: Prices
Chapter 5: Supply
100
What is predatory pricing?
selling a product below cost to drive competitors out of the market
100
If you were in the jeans business, which market structure are you most likely participating in?
What is monopolistic competition
100
Define an oligopoly?
A market dominated by a few large firms.
100
Define Disequilibrium.
describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded
100
What is the law of supply?
tendency of suppliers to offer more of a good at a higher price (higher the price, the larger quantity produced)
200
What is the purpose of Department of Justice Anti-Trust and the Federal Trade Commission?
To protect the consumers by ensuring businesses don't become too powerful.
200
What are the four requirements of monopolistic competition
1) Many Firms 2) Few Barriers to Entry 3) Slight control over prices 4) Differentiation of products
200
Say oligopoly 5 times as fast as you can.
Sorry, I ran out of questions and thought that you could use a good laugh.
200
Where is the excess of demand located on the graph?
The lower portion of the X (between the supply and the demand)
200
Put the number to unit elastic, inelastic and elastic.
Elastic- greater than 1 Inelastic- Less than 1 Unit Elastic=1
300
What was the immediate effect when the government deregulated the airline industry?
More airline companies formed meaning more competition
300
What are the three ways in which firms can encourage consumers without lowering price?
1) Location 2) Style 3) Service
300
What is the main difference or reason why oligopolies exist?
Much more extreme barriers to entry (technology, patents, start up cost, advertisement)
300
What type of goods does the government place for price ceilings?
Essential goods
300
What determines elasticity of demand?
Time
400
How does Department of Justice Anti-Trust and Federal Trade Commission determine whether or not companies merging is good for the market?
By looking into past market trends
400
What would most likely happen if a market is doing well and how will they differentiate their goods?
Many more firms will enter the market and they will slightly alter their goods for copyright reasons.
400
Where do we typically see most oligopolies?
The most convenient and easiest accessible
400
What do prices tell us?
A measure to the demand for the product
400
What is the best way to set price?
Marginal Revenue=Marginal Price
500
What mergers does the Federal Trade Commission and the Department of Justice Anti-Trust allow to form?
More efficient for the consumers
500
A monopoly can control either the _________ or the ___________ but not both.
price or the output
500
What is the difference between collusion and price fixing?
Collusion is an agreement between firms to set prices and production level while price fixing is setting solely the price
500
What are some potential drawbacks to a price ceiling?
Long lines and bribery
500
Would a firm continue to produce goods and lose money, or should its owners shut the factory down?
If the total revenue from the goods is greater than the cost of keeping it open