Question

[1] Sellers are in the same market if they:

A) are in the same industry.

B) use workers that belong to the same labor union.

C) sell similar products and compete for the same buyers.

D) all of the above.

[2] The main determinants of the boundaries of a market are whether:

A) sellers are domestic or foreign-owned corporations.

B) sellers are sole proprietorships, partnerships, or corporations.

C) buyers view the sellers' products as close substitutes for one another, and whether sellers compete for buyers in the same geographic area.

D) none of the above.

[3] The system of market models that classify firms according to number of competitors, product differentiation, and ease of entry into or exit from the market is:

A) market structures.

B) competitive structures.

C) business sector analysis.

D) the North American Industrial Classification System.

[5] Which of the following would be willing to operate at a loss over the long run?

A) An oligopolist.

B) A pure monopolist.

C) A monopolistic competitor.

D) None of the above.

[6] Which is the correct sequence if we are ranking market structures from that with the largest number of sellers to that with the smallest?

A) monopolistic competition, pure competition, monopoly and oligopoly.

B) monopoly, oligopoly, pure competition, and monopolistic competition.

C) oligopoly, monopoly, monopolistic competition, and pure competition.

D) pure competition, monopolistic competition, oligopoly, and monopoly.

Answer 1

1) Option D is correct
All of the above

Explanation:
All of the above 4 options apply because :

Sellers are said to be in the same market when they are a part of same industry e.g in smartphone industry the Apple Inc belongs to sane market where the Samsung operates and customers are shared by Samsung and apple and are competitors of each other trying to attract more customers through product differentiation and other strategies.

The sellers are in the same market if labourers belong to same unions because they have to pay the same rates or they compete to get the most skilled or proficient person or they involve in same collective bargaining activities.

The sellers are in the same market obviously when identical products are sold or competition for sane buyers exist.

2) c is the correct option

buyers view the sellers' products as close substitutes for one another, and whether sellers compete for buyers in the same geographic area.

It will obviously decide what the boundaries should be depending upon the product nature and nature of competitors

3) option B is the correct
Competitive structures
It is only the competitive market structure where the classifications of firm are made as per the number of competitors and in competitive market structure there is an free entry or exit of the firms and firms usually tend to incorporate product differentiation strategy in order to gain a competitive edge over huge number of competitors.

5) option B
Pure Monopoly
No firm would want or be willing to operate in loss in the long run.

As in the monopolistic competitive structure a firm will try best to at least earn normal profits through producing the amount of products which at least cover the marginal costs , thus preventing itself from losses in long run.

In oligopoly structure there are strict barriers to entry and exit thus it helps firm to earn and retain super normal profits , preventing organisation from loss in long run

But in monopoly the giants continues to loose market in long run in order to capture more market share. Because in a pure monopoly the firm can only increase market share if it increases output or decreasing price of products. By continuously decreasing its price , the marginal revenue will always be less than the price of the market thus monopoly will result in loses which it can afford in long run however cannot persistently continue with it.

6) option D is correct
Pure competition, monopolistic competition, oligopoly and monopoly

Explanation:.
Pure competition is a market structure where there are large number of sellers and large number of buyers selling large variety of products.

Monopolistic competition is the condition where there are large number of sellers and buyers but selling differentiated products thus less competition compared to pure competition exist and sellers who are not able to maintain significant differential strategy are knocked out.

Oligopoly market structure consists of few sellers only highly sensitive to the other's strategies

Monopoly is the market situation where there is only one dominant seller having a command over the whole market

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