iVAT Chapter 15

A  Less than 100.

B  Greater than 100 but less than 200.

C  Greater than 200 but less than 400.

D  Greater than 400.

A  Takes into account only the leading firms in an industry.

B  Is easier to calculate.

C  Gives extra weight to firms that are especially large.

D  Tells about only the top 50 firms in an industry.

A  Corn production industry.

B  Fast food industry.

C  Soap production industry.

D  The soda industry.

E  Olive oil industry.

A  Largest four firms in the industry produce 28 percent of the industry’s output.

B  Smallest four firms in the industry produce 28 percent of the industry’s output.

C  Smallest four firms in the industry produce 72 percent output.

D  Largest four firms in the industry produce 72 percent of the industry’s output.

E  None of the available answers.

A  We can conclude that the two companies are in the same market.

B  We can conclude that the two companies are not in the same market.

C  We can conclude that the market is not concentrated.

D  We can conclude that the market is too concentrated.

A  We can conclude that the two companies are in the same market.

B  We can conclude that the market is too concentrated.

C  We can conclude that the two companies are not in the same market.

D  We can conclude that the cable company’s total revenue will increase if the price of satellite TV increased.

A  The higher prices will be.

B  The lower prices will be.

C  The more concentrated the industry will be.

D  The less concentrated the industry will be.

A  The higher prices will be.

B  The more concentrated the industry will be.

C  The higher costs will be.

D  The less concentrated the industry will be.

A  Barriers to entry are much less important than market structure in determining the degree of price competition in an industry.

B  Barriers to entry and market structure are both important in determining the degree of price competition in an industry.

C  Barriers to entry are much more important than market structure in determining the degree of price competition in an industry.

D  Neither barriers to entry nor market structure affects the degree of price competition in an industry.

A  None of the available answers.

B  She perceives that the other meat sellers will reduce their prices as well, and she will be able to increase total revenue.

C  She perceives that the other meat sellers will increase their prices, and she will not be able to gain a large amount of market share. Therefore, she perceives that she is facing an elastic demand curve.

D  She perceives that the other meat sellers will reduce their prices as well, and she will not be able to gain a large amount of market share. Therefore, she perceives that she is facing an inelastic demand curve.

A  She perceives that the other meat sellers will hold their prices at $3.99, and she will gain a large amount of market share.  Therefore, she perceives that she is facing an inelastic demand curve.

B  She perceives that the other meat sellers will hold their prices at $3.99, and she will lose a large amount of market share.  Therefore, she perceives that she is facing an elastic demand curve.

C  None of the available answers.

D  She perceives that the other meat sellers will raise their prices to $5.99, and she will lose a large amount of market share. Therefore, she perceives that she is facing an inelastic demand curve.

A  Implicit collusion.

B  Monopolistic competition.

C  The kinked demand curve model.

D  A cartel.

A  Flexible prices.

B  Interdependent pricing decisions.

C  Few or no economies of scale.

D  Price competition.

A  Monopolistically competitive model.

B  Competitive model.

C  Contestable market model.

D  Cartel model.

E  Contradictory model.