Skip to main content
Pearson+ LogoPearson+ Logo
Back

Competitive Markets quiz #5

Control buttons has been changed to "navigation" mode.
1/38
  • A purely competitive firm's demand schedule is equal to which of the following?
    The market price at all quantities.
  • If you purchase shares of stock on NASDAQ, who is the most likely seller of those shares?
    Another investor.
  • Which of the following statements regarding a competitive firm is correct?
    It cannot influence the market price.
  • Which strategy establishes a price based on the actions of rival firms?
    Competitive pricing.
  • Porter's 5 forces include existing competitors, new competitors, and which 3 of the following?
    Suppliers, buyers, and substitutes.
  • Which of the following are advantages, independent of size, that incumbent firms possess?
    Established customer relationships and brand recognition.
  • In a concentrated retail system, most of the market is supplied by (few or many?) retailers.
    Few retailers.
  • Which of the following is not a basic characteristic of pure competition?
    Product differentiation.
  • Which of the following is an example of a market?
    The foreign exchange market.
  • Efficient supply chains are used by firms that
    Want to minimize costs and maximize customer satisfaction.
  • In inside sales, the salesperson does not have to do much prospecting or qualifying.
    True.
  • Rivalry among competing sellers grows in intensity when
    There are many sellers and products are similar.
  • Uber, Airbnb, and Hotels.com are examples of:
    Platforms that facilitate market transactions.
  • All of the goods below are either sold in perfectly competitive markets or not. Which is sold in a perfectly competitive market?
    Wheat.
  • The table shows total cost and total revenue information for a competitive firm. How does the firm maximize profit?
    By producing the quantity where marginal cost equals market price.
  • Firms that compete within the same strategic group generally experience
    Similar competitive pressures.
  • In a perfectly competitive market, we assume the products are __ in the minds of consumers.
    Identical.
  • Competitive advantage goes to the firm that achieves the
    Lowest cost or highest differentiation.
  • This stage of the product life cycle has the largest number of competitors.
    Growth stage.
  • A very large number of small sellers who sell identical products imply
    Perfect competition.
  • The graph shows the market for pizza cutters. What does a horizontal demand curve indicate?
    Firms are price takers.
  • If new manufacturers enter the computer industry, what is the likely effect?
    Increased competition and lower prices.
  • Broadly defined, competition involves
    Multiple firms striving for the same customers.
  • Competition among economic units
    Leads to efficient allocation of resources.
  • Prices are set by the competitive market when
    No single buyer or seller can influence the price.
  • In the five forces model, threat of entry refers to the risk
    That new competitors will enter the market.
  • The rivalry among competing sellers tends to be more intense when
    There are many sellers and products are similar.
  • In a competitive market, each seller has limited control over the price of his product because
    There are many sellers offering identical products.
  • Perfectly competitive firms are price takers because
    They sell identical products and cannot influence market price.
  • Both buyers and sellers are price takers in a perfectly competitive market because
    No individual can influence the market price.
  • The graph contains individual supply curves for the only two firms. What does this indicate?
    A market with few sellers, not perfect competition.
  • The two types of imperfectly competitive markets are
    Monopolistic competition and oligopoly.
  • Competition in a market system denotes a condition where
    Many buyers and sellers interact freely.
  • Assume Lianna buys coffee beans in a competitive market. It follows that
    She pays the market price and cannot negotiate a lower price.
  • A retailer is an example of a
    Seller in the product market.
  • A product is a price leader when
    It sets the standard price that others follow.
  • What are the basic tools used to analyze supply and demand in a perfectly competitive market?
    The basic tools of supply and demand in a perfectly competitive market include the concepts of buyers and sellers interacting in a market, the assumption of identical goods, the idea that participants are price takers, and the use of ceteris paribus (holding other variables constant) to analyze market changes.
  • In the context of supply and demand, do businesses act as suppliers or demanders in a perfectly competitive market?
    In a perfectly competitive market, businesses act as suppliers, providing goods or services to the market, while consumers act as demanders.