Sophia Micro Unit 3 Milestone Questions and Answers Already Passed

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18 questions were answered correctly. 3 questions were answered incorrectly. 1 Select the statement that is true about perfect competition. Perfect competition is a simplified view of a market. With perfect competition, information is withheld about the market. There are many real-world examples of perfect competition. In perfect competition, firms have the power to set their own prices. CONCEPT Perfect Competition 2 Which example below represents a fixed input? Hourly employees Raw materials for construction 9/29/2020 Sophia :: Welcome https://snhu.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/6382291 2/13 Office space being rented Utility bills CONCEPT Production Function and Constraints 3 Based on the descriptions below of different jobs Nancy has held, which would qualify as an oligopoly? Nancy was a telemarketer for a software company with many buyers and sellers. Everyone’s products were fairly unique, but it was very easy to enter the software market. One advantage Nancy’s company had was that it had an informational advantage over many other companies. Nancy was a customer service representative for the local water company. The company had exclusive rights to operate as the only company providing water to local residents since the costs to lay competing pipelines were a barrier to entry preventing competition. They were, however, regulated by the government. Nancy was an administrative assistant for an oil company with very few other sellers. Other companies had trouble getting into the fossil fuel market. All the fossil fuel companies had the same information, but they had an information advantage over the buyers. Nancy was a fruit vendor. In her market there were many buyers and sellers. It was easy and cheap to start a vendor stand. Everyone’s fruits were basically identical. CONCEPT Oligopoly 4 Which type of market structure has many small firms that spend money in order to differentiate their products through advertising? Monopoly Oligopoly 9/29/2020 Sophia :: Welcome https://snhu.sophia.org/spcc/microeconomics-2/milestone_take_feedbacks/6382291 3/13 Monopolistic competition Perfect competition CONCEPT Monopolistic Competition 5 Which of the scenarios below is an example of a monopoly? In this industry, it is easy to enter and exit the market. A company produces a lemon-lime soda that is identical to others on the market in terms of taste but has a recognizable brand because of advertising. This industry has stable pricing due to the tendency of groups of firms to work together to set prices. A company engages in predatory price cutting in order to discourage any competition. CONCEPT Monopoly 6 Select the definition of output effect. Market price multiplied by the number of units sold The additional revenue from raising the price of a good Amount of revenue lost from lowering the price enough to sell one more unit

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