1. You observe a market where in the long run firms earn zero economicprofit, consumer and producer surplus is notmaximized, and when a new firm enters themarket, the price of similar products decrease.

You are most likely observing

a. an oligopolistic market with differentiated products

b. an oligopolistic market with homogenous products

c. a perfectly competitive market

d. a monopolistically competitive market.

2.An industry has the followingcharacteristics:

The consumers areprice-takers.

The price is set above marginal cost and marginal revenue.

There are more than zero profits in thelong-run.

The product has no close substitutes.

The market conditions of this industry are thoseof:

a. an oligopoly with homogeneous products.

b. monopolistic competition.

c. a monopoly.

d. perfect competition.

3.Consider a market structure in which there are only a few firms. These firms face a downward sloping residual demand curve with some entry barriers in thelong-run. These conditions are satisfied by

a. an oligopolistic

b. a perfectly competitive

c. a monopolistic competitive

market structure. In thismarket, if there are zero economicprofits, then it reflects a situation of

a. homogenous products in the long-run

b. being in the short-run

c. being in the long-run

d. differentiated products in the long-run

.

If there are more than zero economicprofits, then it depicts a case of

a. homogenous products in the long-run

b. being in the long-run

c. being in the short-run

d. differentiated products in the long-run

.