Question

match the definitions with the words

Question 1 options:

A an industry in which average total costs do not change as industry output increases B anything which artificially prevents the entry of firms into an industry C when a firm produces at an output level that is smaller than the output level at minimum average total cost D a single firm can supply the entire market at a lower cost than two or more smaller firms E a firm with no control over the price set by the market F when resources are used to secure rights through the political process G an agreement among rival firms in an industry to set the price and output of a product H measures the degree of market power in an industry I a technique used to analyze the behavior of decision makers who anticipate the moves of other decision makers J the difference between the price the firm charges and the marginal cost of production K the seller charges different prices fora product, not reflective of cost differences L an industry in which average total costs decrease as output increases

1. price discrimination 2. constant cost industry 3. collusion 4. barriers to entry 5. rent seeking 6. price taker 7. game theory 8. mark up 9. concentration ratio 10. decreasing cost industry 11. excess capacity 12. natural monopoly

Answer 1

A an industry in which average total costs do not change as industry output increases 2.Constant cost industry B anything which artificially prevents the entry of firms into an industry 4.barriers to entry C when a firm produces at an output level that is smaller than the output level at minimum average total cost 11.excess capacity D a single firm can supply the entire market at a lower cost than two or more smaller firms 12.natural monopoly E a firm with no control over the price set by the market 6.price taker F when resources are used to secure rights through the political process 5.rent seeking G an agreement among rival firms in an industry to set the price and output of a product 3.collusion H measures the degree of market power in an industry 9.concentration ratio I a technique used to analyze the behavior of decision makers who anticipate the moves of other decision makers 7.game theory J the difference between the price the firm charges and the marginal cost of production 8.mark up K the seller charges different prices fora product, not reflective of cost differences 1.price discrimination L an industry in which average total costs decrease as output increases 10.decreasing cost industry