1. Firms have excess capacity in the long run under?
a. oligopoly
b. cartel
c. monopolistic competition
d. none of these
2. The firm that uses a price taker is:
a. monopolistic competiton
b. perfect competition
c. illegal monopoly
d. None of these
3. Inelastic long run markets demand is very important for this type of industry to survive and do well in the long run:
a. Monopolistic competition
b. cartel
c. perfect compitition
d. oligopoly
4. In the long run, which type of firm may follow a "price leadership":
a. oligopoly
b. monopoly
c. cartel
d. monopolistic competition
5. Increasing marginal returns occurs in some production functions because:
a. specilization of labor
b. raising profits
c. some input being fixed
d. none of these
6. One condition that is true for perfect competition but is not true for Monopolistic competition is:
a. Homogeneous products
b. many small seller
c. free entry and exit
d. perfect information
7. Firms in an oligopoly may:
have large market shares
b. do a lot of advertising
c. follow price leadership
8. Under perfect competition, in the long run firms:
a. sell at price equal to marginal cost
b. make zero profits
c. Produce the maximum technical efficiency output level
d. all of the above