Question

QUESTION 8

1. Which of the following is NOT one of features characterizing market structures?

   		the number and size of firms
   		the likelihood of new firm’s entering a market
   		the level of capital investment in research and development
   		the degree of product differentiation

2.5 points   

QUESTION 9

1. Based on your knowledge about market structures, you would classify the ________ market (industry) as monopolistically competitive.

   		Agriculture
   		Toothpaste
   		Crude oil
   		Local telephone service

2.5 points   

QUESTION 10

1. In which of these continuums of degrees of competition (highest to lowest) is monopolistic competition properly placed?

   		pure competition, oligopoly, pure monopoly, monopolistic competition
   		oligopoly, pure competition, monopolistic competition, pure monopoly
   		monopolistic competition, pure competition, pure monopoly, oligopoly
   		pure competition, monopolistic competition, oligopoly, pure monopoly

2.5 points   

QUESTION 11

1. Which of the following market structures would you expect to yield the greatest product variety?

   		Monopoly
   		Monopolistic Competition
   		Perfect competition
   		Not enough information is provided to be able to answer the question

2.5 points   

QUESTION 12

1. In the 1960s, each firm in the computer industry was able to make extremely large profit margins, some as high as 50 to 60 percent. The margin decreased to 20 to 40 percent in the 1970s and to 10 to 20 percent in the 1980s. We conclude that:

   		market power increased in the two decades.
   		the industry evolved from oligopolistic to a more competitive industry in the two decades.
   		lower profit margins were due to the government's regulation to protect consumers.
   		lower profit margins were largely due to the mismanagement of computer firms.

Answer 1

8.Investment in R&D is not a determining characteristic of a market.

Answer-Third option.

9.Toothpaste

Because every toothpaste is different in a unique way.

10.Pure competition, monopolistic, oligopoly,monopoly

11.Monopolistic competition as product differentiation is the key element of this market structure.

Answer-Monopolistic.

12.The market evolved from oligopolistic to more competitive,and profits margins fell as more producers entered the market.

Answer-Second option