Perfect and Imperfect Competition

no individual or firm has enough power to have any impact on price

 

In the model of perfect/pure competition: 

identical goods

The market for breakfast cereal contains hundreds of similar products, such as Fruit Loops, Corn Flakes, and Rice Krispies, that are considered to be different products by different buyers. This situation violates the perfect/pure competition assumption of: 

only a few sellers

Which is not an assumption of the model of perfect/pure competition is:

(only a few sellers, many sellers, ease of entry and exit, or identical products)

monopolistic competition

An industry characterized by many firms, producing similar but differentiated products, in a market with easy entry and exit is called: 

have no ability to affect the price of a good in a market

 

Price takers are individuals in a market who:

 

identical goods

An assumption of the model of perfect/pure competition is

 

a large number of firms producing differentiated products

Monopolistic competition is an industry characterized by:

 

monopolistic competition

Due to the existence of a large number of similar, but not identical, substitutes in most communities, the market for financial planners is best considered: 

charges slightly different prices

Product differentiation under monopolistic competition means that each firm: 

Oligopolies and Monopolistic competition

Which market structures are considered "imperfect competition"? (select all that apply) (Monopoly, Perfect / Pure competition, Oligopolies, Monopolistic competition)

 

Shutdown point

____________ is the minimum level of average variable cost, which occurs at the intersection of the marginal cost curve and the average variable cost curve.

product efficiency

________________ requires that goods be produced in the least costly way. In the long run, pure competition forces firms to produce at the minimum average total cost of production to charge a price that is just consistent with that cost.

excess capacity

______________ refers to a situation in which a firm operates to the left of the lowest point on its average total cost curve.

imperfect competition

____________________ refers to a market structure with more than one firm in an industry in which at least one firm is a price setter.

price takers

________________ are individuals or firms who must take the market price as given. Individual firms do not exert control over product price since each firm produces such a small fraction of the total output.