In a Large Metropolitan Market, It Is Relatively Easy to Set

question 166

Multiple Choice

In a large metropolitan market, it is relatively easy to set up a law office.The ease of entry explains why you will find hundreds of lawyers listed in the New York City phone book.Each lawyer is a close substitute for another but with slight differences.Which of the following market structures best describes the one in which lawyers operate?

• A)pure competition
• B)perfect monopoly
• C)monopolistic competition
• D)oligopoly
• E)none of the above

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Definitions:

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.

Fixed Expenses

Costs that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Expenses

Costs that change in proportion to the activity or volume of production in a business.

Variable Expense Ratio

The proportion of variable expenses to total sales, indicating how variable costs change with changes in sales volume.