We Can Draw Demand Curves for Firms in Perfectly Competitive

question 209

Multiple Choice

We can draw demand curves for firms in perfectly competitive and monopolistically competitive industries, but not for oligopoly firms.The reason for this is

• A)there are no barriers to entry in perfectly competitive and monopolistically competitive industries. There are high barriers to entry in oligopoly industries.
• B)we can assume that the prices charged by perfectly competitive and monopolistically competitive firms have no impact on rival firms. For oligopoly this assumption is unrealistic.
• C)that perfectly competitive and monopolistically competitive firms are price takers. Oligopoly firms are price makers.
• D)perfectly competitive and monopolistically competitive firms sell standardized products. Oligopoly firms sell differentiated products.

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Definitions:

Market Summary

A description of the current state of the market.

BCG Matrix

A strategic business tool that classifies business units or products into four categories (Question Marks, Stars, Cash Cows, Dogs) based on market growth and market share.

Dogs

Domesticated carnivorous mammals that typically have a long snout, an acute sense of smell, non-retractable claws, and a barking, howling, or whining voice.

Market Share

The portion of a market controlled by a particular company or product, often represented as a percentage of total sales in that market.