Economics - Study Mode

[#1366] In which form of the market structure is the degree of control over the price of its product by a firm very large?
Correct Answer

(A) Monopoly

Explanation

Solution: In Monopoly market structure the degree of control over the price of its product by a firm very large. In a monopoly type of market structure, there is only one seller, so a single firm will control the entire market. It can set any price it wishes since it has all the market power.

[#1367] A firm under perfect competition is
Correct Answer

(C) Price taker

Explanation

Solution: A firm under perfect competition is Price taker. In perfect market conditions (also called perfect competition) a firm is a price taker because other firms can enter the market easily and produce a product that is indistinguishable from every other firm's product. This makes it impossible for any firm to set its own prices.

[#1368] The elasticity of demand of durable goods is
Correct Answer

(B) Greater than unity

Explanation

Solution: The elasticity of demand of durable goods is greater than unity. Price elasticity of demand for durable goods is generally more elastic in short run than in long run. That is, quantity demanded is more sensitive to price changes of such durable goods in short run and not so much in the long run.

[#1369] Which is the other name that is given to the average revenue curve?
Correct Answer

(B) Demand curve

Explanation

Solution: Demand curve is the other name that is given to the average revenue curve. Average revenue curve is often called the demand curve due to its representation of the product's demand in the market.

[#1370] Elasticity is commonly stated in the form of
Correct Answer

(A) 1% change