QUESTION 48

1. The music streaming industry, where a firm's profitability depends on its interdependence with other firms (rivals), is an example of
2. A.Perfect Competition
3. B.Monopolistic Competition
4. C.Oligopoly
5. D.Monopoly

1 points

QUESTION 49

1. An oligopolistic industry is characterized by all of the followingexcept
2. A.existence of entry barriers.
3. B.the possibility of reaping long-run economic profits
4. C.firms pursuing aggressive business strategies, independent of rivals' strategies.
5. D.production of standardized or differentiated products.

1 points

QUESTION 50

1. Suppose your friend Brandon owns a small pastry shop in Harvard Square, Cambridge. He wants to maximize his profit, and thinking back to the microeconomics class he took in college, he decides he needs to produce a quantity of pastries which will minimize his average total cost. Will Brandon's strategy necessarily maximize profits for his pastry shop?
2. Hint: A local shop like this is not likely to be a perfectly competitive business unit.
3. A.Yes; Since his pastry shop is in a perfectly competitive market, the only way to maximize profit is to produce the quantity where average total cost is minimized.
5. B.Not necessarily; This strategy will only maximizeprofit in the long run, but not in the short run
6. C.No; In order to maximize profit, he would never want to producethe quantity where average total cost is minimized.
8. D.Not necessarily; Depending on demand, he may maximize profit by producing a quantity other than that where average total cost is at a minimum.