Answer the following statement true (T) or false (F)
1) In a purely competitive industry competition centers more on advertising and sales promotion
than on price.
2) Price and marginal revenue are identical for an individual purely competitive seller.
3) The demand curve for a purely competitive industry is perfectly elastic, but the demand curves
faced by individual firms in such an industry are downsloping.
4) Marginal revenue is the addition to total revenue resulting from the sale of one more unit of
output.
1) F
2) T
3) F
4) T
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When Japan's MITI (Ministry of International Trade and Industry) focused resources on the semiconductor industry, and in particular on Random Access Memory (RAM), it was viewed as a typically successful Japanese foray into a new dynamic strategic
sector. The results, as viewed by the late 1990s A) justified this view. B) led to similar structuring of industrial policy in the U.S. C) lent support to the Brander-Spencer model. D) helped shift the focus of economists away from Japanese-style industrial policy. E) propelled Japan into the leading country in high-tech manufacturing.
If a firm is to capture all consumer surplus with two-part pricing when customers are different
A) it must be able to charge different access fees. B) it cannot charge different prices for access fees. C) it must set unit price below marginal cost. D) it must set unit price above marginal cost.