1. Perfectly competitive producers do not need to consider how their output levels affect price.
A) True
B) False
2. A primary determinant of market structure is the number of producers in a market.
A) True
B) False
3. For a monopoly, the entry of new firms is difficult, but not impossible.
A) True
B) False
4. A monopolist has a strong incentive to advertise.
A) True
B) False
5. There is only one firm in a monopoly.
A) True
B) False
6. Monopoly is preferred to perfect competition due to its efficiency characteristics.
A) True
B) False
7. In competitive industries, firms that innovate can expect to make no profit in the short run.
A) True
B) False
8. The rule for profit maximization is the same for a monopolist as for a perfectly competitive firm.
A) True
B) False
9. Price is always lower in a perfectly competitive market than in a monopoly market.
A) True
B) False
10. Coca-Cola has a secret formula that has never been copied. This is because Coca-Cola
A) is an unbalanced oligopoly
B) has a trademark that cannot be copied
C) has patent rights on the formula
D) has exclusive access to formula information
E) is a natural monopoly