Question

Question 1

1. 1) Monopolists have a 100% market share or a more than 50% market share ( a near monopoly in the US). Market share measures:

   		a. the total sales of a business
   		b. the growth of sales of a business over a year
   		c. the sales of a business as a percentage of total sales in a market
   		d. the profits of a business as a percentage of total profits in a market

20 points

Question 2

1. 2) In a perfectly competitive market:

   		a, all firms charge the same price
   		b, all firms sell a similiar product
   		c. all buyers and sellers have perfect information about the market
   		d. all of the above

20 points

Question 3

1. 3) A monopolist can earn abnormal or above normal profits (called an economic profit) in the long-run because:

   		a. of barriers to the entry of new competitors
   		b. because they can charge the highest price the market will bear
   		c. because they reduce output below the perfect competition output
   		d. all of the above

20 points

Question 4

1. 4) In an oligopoly:

   		a. firms can collude to reduce industry output and raise the market price for all firms in the industry
   		b. a firm's dominant strategy is its best strategy no matter what the other firms do
   		c. a common feature is a "Kinked " demand curve
   		d. all of the above

20 points

Question 5

1. 5) In monopolistic competion:

   		a. there are many firms
   		b. each firm seeks to differentiate their product from their competitors
   		c. similiar to perfect competition, all firms just earn a normal profit in the long run
   		d. all of the above

Answer 1

Sol :

1.) Option (c) is correct

(the sales of a business as a percentage of total sales in the market )

As, market share is teh share of the firm in the market and that share can be used in terms of sales.

2) Option (d) is correct

(All of the above )

As, all of the feature are related to the perfectly competitive market

Perfectly competitive market means the market in which firm sales the similar product and are able to charge same price because of price taker.

3) Option (d) is correct

(all of the above)

because monopoly means the firm in which firm is the only seller in the market and can charge higher prices .

Due to higher prices , firm can earn abnormal profits.

4.option (d) is correct

(all of the above)

As, oligopoly means the market in whcih few firms selling the same product and it is very difficult to determine the demand curve.