A2 Econ - Micro - Market Structures 1
Quiz by Mark Seccombe
EdExcel (A-Level)
Economics A
English National Curriculum
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- Q 1/10Score 0Which of the following can be deduced from the above information?29The US airline industry is a natural monopolyThe four firm concentration ratio is 64.5 per centThe US airline industry is monopolistically competitive
There are low sunk costs in the US airline industry.
The US airline industry is highly concentrated
10 questions
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- Q1Which of the following can be deduced from the above information?The US airline industry is a natural monopolyThe four firm concentration ratio is 64.5 per centThe US airline industry is monopolistically competitive
There are low sunk costs in the US airline industry.
The US airline industry is highly concentrated60s3.4.4 - Q2Super normal profits being made by a perfectly competitive firm in the very short run would disappear in the long run because offirms engaging in large scale advertising
high sunk costs
allocative inefficienciesdifferentiated goodsfreedom of entry into this market60s3.4.2 - Q3A profit maximising monopolist facing constant average costs experiences a decrease in demand. Other things being equal, which of the following is likely to happen?Output falls, price rises, profit fallsOutput stays constant, price falls, profit fallsOutput rises, price rises, profit stays constantOutput stays constant, price rises, profit falls
Output falls, price falls, profit falls
60s3.3.4 - Q4Assuming that demand is price inelastic, which of the following strategies shown in the grid would maximise the revenue of the two firms?Both firms set a high priceAPJ sets a high price and Juju a low priceBoth firms set a low priceJuju sets a high price and APJ a low price
Both firms set a price to increase consumer surplus
60s3.4.4 - Q5A firm in long run equilibrium under monopolistic competition will beallocatively but not productively efficientproductively but not allocatively efficientproductively and allocatively inefficientmaking supernormal profits
allocatively and productively efficient
60s3.4.3 - Q6In May 2009, British Airways (BA) quoted the following prices for a flight from London to Toronto, Canada. The most likely explanation of this pricing strategy is:that there is a difference in price elasticity of demand in August and Octobermore spare capacity on BA’s planes on 1 August 2009
an expectation that the world recession will be over by October 2009
higher costs of flying planes in October than in Augustthe expectation that some airlines will go bankrupt between August and October 200960s3.4.5b - Q7A firm engaged in ‘satisficing’ behaviour is most likely to:minimise costsmaximise profits
produce at an output different to that of a profit maximising firm
maximise salesmaximise revenue60s3.2.1d - Q8A profit-maximising firm will produce at the productively and allocatively efficient level of output in which of the following market conditions?
Oligopoly
Perfect competition in the long runMonopolistic competition in the long runPerfect competition in the short runMonopoly60s3.4.1 - Q9The diagram shows the costs and revenues for a profit maximising firm in a market. The most likely outcome for the firm, assuming no change in costs or demand, is to
shut down immediately
continue in business and cut the pricecontinue in business and raise the pricecontinue in business in the short run but shut down in the long runcontinue in business and make supernormal profit ZYWX60s3.3.4 - Q10Game theory can be used to illustrate which of the following examples of competitive behaviour?Price leadership in perfect competitionLimit pricing in monopolistic competitionTacit collusion in oligopoly
Price discrimination by a monopolist
Revenue maximisation in monopolistic competition60s3.4.4
