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1
1.
- A market made up of numerous small sellers each offering identical products with complete freedom of entry and exit and where each firm is a price-taker rather than a price-maker is a/an:
- Perfectly competitive market
- Monopolistically competitive market
- Oligopolistic competitive market
- Monopoly
- A market in which there exits a small number of relatively large firms which are constantly aware of and responding to each other’s possible actions and reactions regarding price and non-price competition is a/an:
A. Perfectly competitive market
B. Monopolistically competitive market
C. Oligopolistic competitive market
D. Monopoly
- When other determinants of demand change apart from price, there will be a
- Movement along the demand curve
- Shift of the demand curve
- Stationery of the demand curve
- Collapse of the demand curve
- Products with a price elasticity of demand exactly to 1 are said to have a
- Price inelastic of demand
- Price elastic of demand
- Unitary elastic of demand
- Price changers of demand
2.S $6 6 Price 5 0 40 50 60 Quantity Refer to the graph above. If demand decreases, then total revenues will Multiple Choice decrease. increase.
Expert Solution
1.1. A. Perfectly competitive market.
reason: The question mentions the features of a perfectly competitive market. There are numerous sellers who do not have the power to influence the market, who sell identical products, and who can enter or exit the market freely.They are price takers as they cannot influence the market.
2. C. Oligopolistic competitive market
reason: In an oligopolistic market, there are a few sellers who respond to each others' strategies and fix price or quantity based on the other selllers.
3. B. Shift of the demand curve
reason: when demand changes due to price, there is a movement along the demand curve. But when demand changes due to some other factor, the demand curve shifts. It shitfs to the right when there is an increase in demand, and shifts to the left when there is a decrease in demand.
4. C. Unitary elastic of demand
reason: when elasticity is 1, it's unitary elasticity. When elasticity is more than 1, it's elastic. Elasticity less than 1 makes it inelastic.
2.
From the graph we see that as the demand decreases, the supply increases. As the supply increases, the revenue generated will increase. Thus, answer is:
increase
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