Theoretical basis for the preparation of
For a practical lesson
The offer of a perfectly competitive firm in the short run. Demand for the product of a perfectly competitive firm. Offer in the short term. Profit maximization of a competitive firm. Optimization of production at the level of self-sufficiency. Optimization of production in case of incurring losses. The supply curve of a perfectly competitive firm.
The offer of a perfectly competitive firm in long term. The long-run supply curve of a perfectly competitive firm.
Industry offer. Industry supply in the long run. An industry with fixed costs. An industry with rising costs. A cost-cutting industry. Efficiency of competitive markets. Rational distribution of resources. Effective use resources.
Competition as an element of the market.
Free competition, its advantages and disadvantages.
Monopolistic competition. The emergence of monopolies is the reason for the transition from free to monopolistic competition. Monopolies created by the state. natural monopolies.
Types of competition in the conditions of monopolistic production: monopsony, oligopoly, duopoly. monopoly price. Antimonopoly law.
Test
1. Polypoly is a synonym for:
a) oligopoly;
c) pure competition;
d) monopsony.
2. There is no price competition:
a) in a market of pure competition;
b) in the market of pure monopoly;
c) in an oligopolistic market;
d) is present in all types of markets.
3. What is the difference between monopolistic competition and perfect competition?
a) there are serious obstacles to entry into the market of monopolistic competition;
b) competing firms sell differentiated products;
c) competing firms sell unique products;
d) cost estimation.
4. What does the concept of "homogeneity of products" mean:
a) there is only one seller in the market;
b) the goods offered on the market are identical in their properties;
c) there are no opportunities for product differentiation;
d) all products are certified.
5. Pricestakers are called:
a) firms - participants in the market of pure competition;
b) monopoly firms;
c) oligopolists;
d) price leaders.
6. The main feature of oligopolistic competition:
a) freedom of enterprises to set prices;
b) the interdependence of the price behavior of enterprises;
c) high prevalence of price collusion;
d) homogeneity of goods.
7. Non-price competition plays decisive role on the market:
a) perfect competition
b) monopolistic competition;
c) oligopolistic competition;
d) monopolies.
8. Under what condition does a competitive firm get the maximum profit?
a) average total cost equals marginal revenue
b) total income takes the maximum value;
c) marginal cost is equal to average income;
d) average total costs take the maximum value.
9. Most markets in the Russian economy are:
a) perfect competition
b) oligopoly;
c) monopsony;
d) a set of competitive and monopolistic elements.
10. Example natural monopoly is:
a) the company "Lenvest";
b) Kommersant Publishing House;
c) urban subway;
d) Bank "Commercial".
11. A monopolist differs from a competitive firm in that:
a) can produce any volume of products and sell it at any price;
b) produces more products and sets the price higher;
c) under a certain market demand curve, independently chooses such a combination of output and price that maximizes profit;
d) chooses the volume of output at which MR = R.
12. Among the statements below, determine the incorrect (incorrect):
1) an individual firm operating in conditions of perfect competition can sell large quantity its goods only in the event of a corresponding reduction in the price of it;
2) in a perfectly competitive market, firms wage a price war;
3) oligopolies always have higher profits than competitive firms;
4) perfect competition is characterized by the absence of non-price competition.
13. Among the statements below, determine the correct (correct):
1) an imperfect competitor does not have the ability to influence the level of market prices;
2) in conditions of perfect competition, an individual producer, reducing the volume of production and sale of goods, can change its price;
3) under conditions market economy more goods can be bought by those who have a greater need for them;
4) an increase in prices for resources leads to a reduction in demand for the goods from which they are made.
14. The difference between pricing under perfect competition and pricing under imperfect competition is that:
a) in conditions of perfect competition, the firm is forced to adapt to the existing market price, and in conditions of imperfect competition, it can dictate the price;
b) in conditions of perfect competition, the firm extends its influence to a smaller number of agents than in conditions of imperfect competition;
c) in conditions of perfect competition, the firm applies price discrimination, and in conditions of imperfect competition - non-price discrimination;
d) under conditions of imperfect competition, the firm has no incentive to charge a price above marginal cost.
15. Product differentiation allows manufacturers to:
1) to charge a higher price for the goods than in the conditions of free competition;
2) set the price of goods as freely as in a monopoly;
3) spend less resources on manufacturing products;
4) produce products in volumes corresponding to the volumes of perfect competition.
16. In an oligopoly, producers do not resort to price cuts because:
1) they already sell goods at the lowest possible prices;
2) by lowering prices they cannot attract new buyers;
3) they seek to set the highest price at which their goods can be sold;
4) Other manufacturers in the industry may follow suit.
17. Which of the following is not characteristic of perfect competition:
a) the firm's demand curve is horizontal.
b) the firm's demand curve is also its average income curve;
c) the firm's demand curve is also its marginal revenue curve;
D) the firm's demand curve is perfectly inelastic.
18. If firms operating in the market do not receive economic profit in the long run, then such a market structure is called:
a) a monopoly
b) perfect competition;
c) an oligopoly;
d) monopsony.
19. The concept of a perfectly competitive firm implies that:
a) the firm is unable to compete with other firms;
b) the firm takes dominant position in branch;
c) the company fights its competitors with official methods;
d) it is a firm that does not influence the formation of the market price.
20. Under what situation is a perfectly competitive firm ready to stop working?
a) when the price is equal to the minimum average total cost;
b) when the price is constantly falling;
in) R = MS;
d) the price is equal to the minimum average variable cost.
Practical tasks
1. There are 250 firms in a perfectly competitive industry divided into three groups. The marginal cost of 100 firms in the first group is described by the equation MC 1 = 100Q 1 + 1; 100 firms second - MC 2 = 200Q 2+2; 50 firms of the third - MC 3 = 100Q 3 + 1. The market demand function is described by the equation Q = 25 – P. Find the equilibrium price and quantity sold in the market.
2. The cost function of a competitive firm is described by the equation: TC = Q 2 + 4Q+ 16. Determine at what market price this firm receives a normal profit in the long run.
3. Market research matches. Being in a duopoly, found that the response functions of each firm - the manufacturer of matches have the following form: Y 1 = 100 – 2Y 2 , Y 2 = 100 – 2Y 1 , where Y 1 and Y 2 - characterize the production volumes of the first and second firms, respectively. Draw the response functions graphically and calculate the proportions of the market division between them.
4. There are three firms in the industry the same size. The marginal cost of each firm is the same, constant and equal to 298 rubles. Demand for the industry's products is presented in Table. 35.
Table 35
| price, rub. per unit | |||||
| Volume of demand, thousand pieces |
If firms form a cartel and share the market equally, what will be the equilibrium price and how much output will each firm produce?
5. There are 10 firms in the industry. The marginal cost of each firm is described by the formula: MC = 100 – 30Q + Q 2. The demand for the industry's products is: R = 100 – Q. What should be the output of each firm for the industry to be in equilibrium in the long run?
6. The total costs of the monopolist are given by the equation TC= 200 + + 2Q, and the equation of the demand function for its product P= 400 – Q. What will be total income firm, if its monthly output is 50 units?
7. The firm operates under perfect competition. The price of products in the industry is 8 rubles. for a unit. The function of the total costs of the firm is presented in Table. 36.
Table 36
| Production output, pcs. | Total costs, rub. |
Calculate the necessary data and determine tabularly and graphically the volume of output at which the firm maximizes its profit. What is the maximum profit, total income and total costs of the firm at a changing price in the market. Determine in which situation in the market the firm will have zero profit and in which it will be forced to leave the industry.
8. Two enterprises A and B functioned in the industry with the following supply functions: Q S A = –100 + 4P, Q S B = –50 + P.
The demand for products in this industry is characterized by the function Q D = 210 – P. As a result of competition, enterprise A absorbs a competitor, converting it to the production of non-core products for this industry. How will the equilibrium price level change in the industry?
9. The marginal revenue of the firm is equal to: MR = 1000 – 20Q, total income: TR= 1000Q - 10 Q 2, marginal cost: MC = 100 + 10Q. Determine the market price and sales volume if the firm is a monopolist.
10. The function of demand and gross costs of a conditional monopolist is described by the equations: P = 5000 – 17Q D and TC = 75000 – 200Q – 17Q 2 + Q 3 . Determine the maximum total profit that can be received by the monopolist.
Examples of problem solving
Task 1
A perfectly competitive firm sells its product at a price of 20 den. units for one product. The firm's gross cost function has the form
TS = 75 + 17Q – 4Q 2 + Q 3 .
Determine the output that maximizes the firm's total profit.
Solution
Total profit ( Pr) of the firm can be calculated as the difference between the firm's income from product sales ( R · Q) and its gross costs:
Pr= 20 Q – (75 + 17Q – 4Q 2 + Q 3).
The condition for the extremum and, in particular, the maximum of the function is the equality to zero of its first derivative:
(–75 + 3Q + 4Q 2 –Q 3)" = 3 + 8Q – 3Q 2 = 0.
27. Conditions of perfect competition. Features of the perfect competition market.
Perfect competition assumes that the following conditions are met:
1. Uniformity of products.
2. Small size.
3. No barriers.
4. Perfect information.
2.1 Features of a perfectly competitive market
Perfect competition is a type of market structure that is most consistent with the basic principles of organizing a market economy, a "pure", modified market. Key features of a perfectly competitive market:
A significant number of sellers and buyers in a particular market;
The volumes of production and supply of an individual producer constitute such an insignificant share in the total volume of supply that an individual firm cannot influence the price;
All sellers offer homogeneous, standard, unified products;
All market participants (sellers and buyers) have the same information about the state of affairs in the market;
Mobility of all resources, which implies freedom of entry into and exit from the industry: any firm can start the production of a given product or leave the market without hindrance.
Perfect competition forces firms to produce products at the lowest average cost and sell it at a price corresponding to this cost.
Perfect competition does not provide for the production of public goods, which, although they bring satisfaction to consumers, cannot be clearly divided, evaluated and sold to each consumer separately (by the piece).
Perfect competition, involving a huge number of firms, is not always able to provide the concentration of resources necessary to accelerate scientific and technological progress.
Perfect competition contributes to the unification and standardization of products.
28. Continued production in the short run
The criterion for the expediency of production in the short run is that losses do not exceed the size of fixed costs.
For a firm operating in the short run, there are three principal options for behavior:
· production for profit maximization
the gross income curve turns out to be in a certain section above the gross cost curve. It is in this case that the firm will make a profit, and it will choose the level of production where the profit is maximum.
· production to minimize losses
the income curve is below costs throughout its entire length, i.e. there can be no profit. Initially, the losses are small. Then, as production grows, they decrease, reaching their minimum when Q2 units are produced. And then they start growing again. It is obvious that the release of Q2 units of production under these conditions is optimal for the firm, since it ensures the minimization of losses.
· termination of production
The gap between costs and income only increases with the growth of production. In other words, losses increase monotonically. In this situation, it is better for the firm to stop production, resigned to the inevitable losses in this case in the amount of gross fixed costs.
29. Continuation of production in the long run
The criterion for the expediency of producing a perfect competitor in the long run is the presence of non-negative economic profit.
Long-term (long) period -this is the length of time during which all factors are variable. In the long run, the firm has the ability to change the overall dimensions of buildings and structures, the number of machines and equipment used, etc., and the industry - the number of firms operating in it. The long run is the period during which barriers to entry and exit from an industry are overcome.
Unlike the shortest period, in which all factors of production are constant, and the short-term period, where some of the factors are constant and some are variable, in the long run, the firm can change all production parameters. The distinction between three periods is important for analyzing the costs and characteristics of a firm under conditions of perfect competition, pure monopoly, oligopoly, monopolistic competition, and other types of market structures.
Perfect Competition
We begin our analysis with a situation of perfect competition. Perfect competition occurs only if a number of rigid assumptions are met. To be more precise, there are four such rigid assumptions:
1. There are many independent sellers on the market, and the share of each seller in the total sales is negligible.
2. Firms produce absolutely identical goods, so that the buyer has no way to distinguish the goods of different firms
3. The entry of firms into the industry and their exit from there is free. This means that firms can cost-free attract additional resources to this market or extract them from there.
4. Sellers and buyers have complete information.
Quite often one can hear remarks that the presented model of perfect competition is too abstract, since none of the conditions is observed in the real economy in pure form. Indeed, it is rare to find an industry where there would not be a dominant firm whose pricing policy serves as a guide for smaller sellers of the good. The number of properties of a good that sellers pay attention to is so large, and the preferences of buyers are so intricate, that it is almost impossible to ensure the complete identity of the goods. The requirement of absolute elasticity of production resources (zero costs for entry/exit from the industry) is actually not as absurd as it might seem at first glance. For example, if a farmer decided to grow hemp instead of potatoes, then he does not have to transfer his plot at all, it is enough to change the structure of the sown wedge. Likewise, for many people, moving from one labor market to another does not involve transportation costs. But, firstly, not all resources have such high elasticity, and, secondly, even for highly elastic resources, the value of moving costs is never zero. Finally, with regard to information, our premise is that the buyer and seller are aware of all alternative options decision, which, of course, exceeds the capabilities of even the most dexterous and sophisticated people. It is all the more surprising that the model of perfect competition constructed above not only turns out to be quite workable, but also capable of adequately describing many markets encountered in the real world.
As follows from our model, when perfect competition has been established in any industry, then no seller will be able to influence the market price of a good. At the prevailing price, he will be able to sell any amount of the good, but if he increases the price of the good by even a penny, he will immediately lose all buyers. The reason for this is that the good it offers is no different from the good offered by its competitors, and buyers have no reason to pay a higher price. The demand curve for the benefit of a perfect competitor is given by a horizontal line passing at the level of the market price (Fig. 1). Since each subsequent copy of the good can be sold at the same price as the previous one, insofar as marginal revenue perfect competitor is equal to the market price of the good, i.e. P = AR = MR.
Now let's graphically define the conditions for maximum profit for a perfect competitor. To do this, you need to plot the marginal cost of the firm. We have already mentioned above that the firm's cost function can rarely be defined functionally, but in most cases the graph of marginal cost (MC) has a characteristic parabolic shape (Fig. 2). One can argue about how universal such a form is when characterizing the firm's cost function, but such a hypothesis has two strengths: firstly, it is empirically confirmed; secondly, it is justified theoretically.
Now it is time to analyze the conditions for the optimum of a firm operating in conditions of perfect competition. To do this, the graph of marginal cost is compatible with the graph of marginal utility. In this case, one difficulty inevitably arises - the level at which the market price of the good will be established is unknown. Suppose that in the initial period the price of the good was quite high (Fig. 2) and amounted to OL. Based on the rule of maximum profit formulated by us (MR = MC), the firm will produce ON goods and receive revenue in the amount of OLVN. At this level of production, the firm's average cost is NK, and total costs– OBKN. The firm will make a profit of BLVK. But such a situation in the market is not compatible with long-term equilibrium. Indeed, attracted by unusually high profits, competitors will rush into the industry (this follows from the very definition of perfect competition we gave at the beginning of the chapter). The volume of supply of the good in the market will increase, which will inevitably lead to a decrease in the market price. In the figure, this is expressed in the fact that the LV line will begin to move down.
Now consider the reverse situation, when the price is set at a low level in the initial period (Fig. 3). Now the price of the good is OB, and the firm's supply of the good is ON. Since the price of a copy of the good is lower than the average cost of its production, the firm will receive a negative profit (loss) in the amount of BLVK. Under such conditions, firms will begin to leave the industry. The supply of the good will decrease, but its market price will begin to rise. It is obvious that such an initial price is not compatible with the equilibrium in the industry. Thus, excluding all other options, we find that the equilibrium in an industry can only be stable if the market price corresponds to the minimum average cost of a typical firm in the industry, as shown in Fig. 4. In this case, firms already in the industry have no incentive to leave, while firms outside the industry have no incentive to enter the industry.
Obviously, under conditions of stable equilibrium (in economic theory this situation is commonly called "equilibrium in the long run") all firms in the industry will receive zero economic profit. How can this be reconciled with our notion that a market firm seeks to maximize profits and leave the industry if it does not earn below average profits? To resolve this misunderstanding, it is necessary to recall that there are two concepts of profit - economic profit and accounting profit. Accounting profit is defined as the balance on the accounts of the firm after paying off all liabilities. It is simply the firm's gross revenue minus gross explicit (accounting) costs. Economic profit is calculated as the difference between the firm's total revenue and the firm's reimbursement of the services provided by the factors of production that the firm used to produce the good. In other words, economic profit- is the difference between revenue and all costs of the firm - both explicit and alternative. In conditions of perfect competition, the firm is forced to compensate for the services of hired factors of production in exact accordance with their productivity. If perfect competition prevails in all markets, then the firm cannot charge a factor reward rate less than its productivity, measured in monetary terms. If the business owner appoints 
a lower rate of remuneration, then the owner of the acquired factor of production will withdraw it from this firm and offer it to another firm, where the rate of remuneration corresponds to the productivity of the factor. For example, if the return from an employee is 600 rubles per hour, and the company sets an hourly rate of 500 rubles, then competitors will have an incentive to attract an employee for 550 rubles. Such a transaction is most likely to take place, since it is mutually beneficial - both parties will receive a gain of 50 rubles compared to the initial situation.
On the other hand, the owner of a factor of production (the same worker) cannot ask for it big price than its monetary productivity. Then the owner of the firm will simply refuse to use this factorial unit and attract another unit, the owner of which is not so demanding. But how then to explain that various firms operating in the same industry and using the same factors of production earn different accounting profits? The secret lies in the fact that firms use different quality units of the “entrepreneurial ability” factor. If the owner of the firm is talented, then the revenue of the firm, other things being equal, baseline will be more than that of a firm headed by an untidy business relations entrepreneur. The first firm will prosper, while the second firm will sooner or later die out. But we must attribute the difference in accounting profits solely to the fact that the first firm managed to attract a higher quality unit of the “entrepreneurial ability” factor. As a result, the additional accounting profit must be attributed to this factor. Simply put, the first entrepreneur should be paid at a higher remuneration rate. The economic profit of both firms is zero. Therefore, speaking of the firm's zero profit, we mean that the services of all factors attracted by the firm are paid at the standard (normal) remuneration rates adopted in the industry. This also applies to entrepreneurs. If the firm earns zero profit, then it means that it earns an average profit and nothing more than that. In economic theory, such profit (zero) is usually called competitive profit. Prices corresponding to the minimum average cost of a firm operating in an industry are called competitive prices.
Monopoly
In economic theory, a monopoly is a situation in which there is only one seller of a good in the market. This seller is called a monopolist. The most important difference between a monopolist and a perfect competitor is that the monopolist is able to influence the market price of a good. To do this, it is enough for the monopolist to change the volume of sales of the good: to reduce the supply of the good, if it is necessary to increase the market price, or to increase the supply, if he prefers a lower price. As a result, the demand curve for the good sold by the monopolist acquires a negative slope (Fig. 5) - the firm can sell more of the good only if it lowers its price (other conditions are assumed unchanged). As for the marginal revenue schedule, it is even lower than the demand schedule. This is explained by the fact that each subsequent unit of the good brought by the monopolist to the market is not only cheaper than the previous units, but also reduces the cost of the entire batch of the good intended for sale when it appears. If a firm intends to sell a lot of N + 1 items of a good, then it will not be able to sell it for the same price as a lot of N goods. The value of marginal revenue can be calculated as the difference between the price of a sold instance of a good and the amount by which the entire lot of the good that was on the market fell in price as a result of the appearance of this instance. In a formalized form, this can be written as follows:
MR = P N + DP Q N-1 .
It is clear that with a sufficiently large volume of sales of the good, the marginal revenue will become negative, even if the negative price increment caused by the sale of the Nth instance of the good will be very small. For verification, we leave it to the reader to decide for himself which copy of the good will ultimately reduce the company's revenue if the first copy of the good is sold for 60 rubles, and the sale of each subsequent one reduces the market price of the good by 2 rubles.
Consider under what conditions a firm with monopoly power will receive the maximum profit. For this, the schedule of marginal revenue and marginal costs of the firm is compatible (Fig. 6). The point E at which these functions intersect is the optimum. The firm will produce ON the good and sell it at the price NS (OL). At the same time, the average cost required to produce such a volume of good is NK. Therefore, each copy of the good sold by the firm will bring it an unusually high profit (that is, a profit that exceeds the average, normal level) in the amount of KS. The firm's total revenue corresponds to the area of the OLSN figure, and its total cost corresponds to OBKN. By subtracting total costs from total revenue, we determine the firm's profit, which is equal to the area of the BLSK figure. This profit is called monopolistic, indicating that it can be obtained only in the absence of competition. Considering the situation of perfect competition, we pointed out that an unusually high profit can be obtained by a perfect competitor, but only for a short time, until the industry is filled with competitors. Monopoly profit is sustainable because competitors cannot enter the industry.
If we continue to compare the situation of monopoly with perfect competition, then first of all it should be noted that in the first case the price is set at more than high level while the amount of goods produced is decreasing. How should such a situation in the industry be assessed? Studying the equilibrium price phenomenon, we noted that any price increase above the equilibrium level is accompanied by a loss of net social utility, that is, the excess of the total social utility of the good over the social costs of its production. In the same place, we said that the deviation of the price from the equilibrium level signals an inefficient allocation of resources between industries. The foregoing fully applies to the dominance of monopoly in the industry. If the supply of the good were increased to OH, then society could regain its lost net utility, but from the point of view of the monopoly, this volume of production is not optimal, since it does not provide it with maximum profit. Therefore, it reduces the volume of production, and society loses net utility in an amount equal to the area of the ESF triangle. This is precisely the evil that monopoly inflicts on society. It leads to the fact that the resources at the disposal of society are used inefficiently. It follows from what has been said that society is compelled to take special measures to prevent the domination of monopoly.
Having taken a monopoly position in the market, the firm begins to receive monopoly profits. Therefore it may seem that effective tool the fight against the monopoly will be the withdrawal of its profits in the amount of BLSK. In reality, this is not so. Profit taking will not affect the position of the firm's marginal cost curve, which means that the firm's optimum point will not change its position in space. The firm will produce ON the good, which is less than the optimal volume: society will still suffer losses due to the underproduction of the good.
2.4.2. Behavior of the firm in the conditions of modern competition
A perfectly competitive firm This is a firm that accepts the price for its products as given, regardless of the volume of products sold. Such a company is called price staker- it affects demand.
The demand for the product of an individual seller is perfectly elastic and the curve has the following form:
The price in conditions of perfect competition is constant for an individual firm. The industry market demand curve is a normal downward curve.
1. The seller's gross revenue is directly proportional to the amount of goods sold.
2. Average revenue is the price of a commodity.
3. Marginal revenue is the price of a commodity, i.e. additional units of a commodity can be sold at a constant price.
The supply curve of a perfectly competitive firm expresses the functional dependence of the volume of supply on changes in the market price, since the firm will maximize its profits or minimize its losses up to the equilibrium point MC=P, i.e. this supply function will be determined by the marginal cost curve. This curve in the short run will be ascending and coincide with the segment of the marginal cost curve, which lies above the minimum point of average variable costs.
Profit maximization in the short run
In the short run, production capacity stays the same and the number of firms in the market stays the same.
Two approaches:
1. comparison of gross income and gross costs;
2. comparison of marginal revenue and marginal cost.
The firm maximizes profit at the level of output where gross revenue exceeds gross costs by the maximum amount. The firm will minimize its losses at the volume of output at which gross costs exceed gross income by the least amount. If there is no production at which gross income exceeds variable costs, the firm will minimize losses in the short run by closing. A firm will maximize profits or minimize losses only if marginal revenue equals marginal cost. MR=MC=P(at the point where price equals marginal cost). With a certain actual profit or surplus, prices and average gross costs must be compared.
In the long run, the number of firms in the market may change due to the entry of new firms into the industry. As a result, the supply increases, prices fall, and the amount of profit received by each seller decreases. Lower prices and profits tighten competition and some firms leave the industry, then the market supply is reduced, and prices rise. Rising prices and economic profits will attract new producers. The process of entry and exit will stop when there is no economic profit. This will happen when the price coincides with the minimum of the long-run average cost. p=minLAC. Thus, in the long run, the economic profit of a perfectly competitive firm will be 0.
TESTS
CLOSED TEST FORM
For each task, choose the only correct answer.
1. A group of firms producing the same or, in extreme cases, similar products is:
a) an enterprise;
b) industry;
2. When economists use the concept of "branch market", they mean by this:
a) a grouping of firms using the same resources;
b) the range of products produced by a particular industry;
c) a group of firms producing complementary products;
d) a group of firms producing interchangeable products;
e) a group of firms characterized by common organizational features.
3. Perfect competition is a market situation where it operates:
a) a large number of competing firms producing a homogeneous product;
b) a small amount of competing firms;
c) only one large firm;
d) only one large buyer;
e) a large number of firms producing a differentiated product.
4. The concept of "perfectly competitive firm" implies that:
a) it is a firm that uses only methods of legal competition;
b) it is a firm that does not influence the formation of the market price;
c) it is a firm that uses any form of competition to capture the market;
d) it is a firm that achieves the establishment of the desired price;
e) the firm uses non-price competition methods.
5. Market barriers in a perfectly competitive market:
a) irresistible;
b) high;
c) are absent;
d) low.
6. A situation approaching perfect competition is likely to be characteristic of:
a) the grain market;
b) the market cars;
c) the market for teacher services;
d) the pencil market;
e) the market of cosmetic services.
7. The gardener grew a large crop of cucumbers on his plot and decided to sell them at a price higher than the market price. Specify what this will lead to:
a) the price of cucumbers will rise;
b) prices for cucumbers will go down;
c) the price of tomatoes will increase;
d) the market price of cucumbers will not change.
8. The firm can in no way affect the price if it operates under the conditions:
a) perfect competition
c) oligopoly;
d) monopolies.
9. A firm operating in a perfectly competitive market reduces the supply of its products. It:
a) will lead to a decrease in the market price of the product;
b) will not have any impact on the market;
c) lead to an increase in the market price of the product;
d) will reduce the market supply and increase the market price of the product.
10. Absolutely elastic demand for the firm's products is a criterion:
a) perfect competition
b) monopolistic competition;
c) pure monopoly;
d) oligopolies.
11. The supply curve of a firm - a perfect competitor in a short period of time is:
a) an ascending section of the curve of average total costs;
b) ascending section of marginal costs;
c) the section of the marginal cost curve that lies above the average total cost curve;
d) the section of the marginal cost curve that lies above the curve of average variable costs;
e) the portion of the average variable cost curve that lies below the marginal cost curve.
12. The condition for maximizing the profit of a firm in conditions of perfect competition has the following form:
a) ATS = R;
b) P = MR;
in) MC = AR;
G) P = MC = MR;
e) P = MR = AR.
13. A perfectly competitive firm maximizes profits under the condition:
a) ensuring the lowest production costs;
b) equality of the values of its marginal production costs to the market price of the product produced;
c) sales of the maximum volume of products;
d) provision maximum profit per unit of production.
14. If a firm, under conditions of perfect competition, leaves the industry, this means that:
a) the firm is making a loss
b) the firm's normal profit is zero;
c) the firm's total costs are equal to its revenues;
d) bad weather
e) the firm uses price discrimination.
15. With long-term equilibrium, the most cost-effective:
a) monopoly;
c) monopsony;
d) perfect competition;
e) oligopoly.
KEYS OF CORRECT ANSWERS
Closed test form (one correct answer)
| 1. b | 2. g | 3. a | 4. b | 5. in | 6. a | 7. g | 8. a | 9. b | 10. a | 11. g | 12. g | 13. b | 14. a | 15. g |
MODULAR UNIT 14.
MONOPOLY
