Question

Please help me with these multiple choice questions, thank you!

Which type of market is characterized by a few large firms selling either differentiated or commodity products and having strong barriers to entry?
a. Pure Competition
b. Monopolistic Competition
c. Monopoly
d. oligopoly

What happens to the firm’s long run average cost (LAC) as it produces more and there is are economies of scale?

a.    LAC changes, but we cannot tell how from this information

b.    LAC declines

c.    LAC increases

d.    LAC remains constant

Why was Nabisco so open in its 1901 annual report about discussing its efforts to monopolize the cracker (biscuit) industry?
a. Nabisco’s market share was too low
b. Nabisco was being very arrogant and reckless
c. Nabisco and other manufacturers were not subject to antitrust laws in 1901
d. Nabisco had figured out how to bribe Justice Department officials
e. The government was actually promoting cracker monopolies in 1901

Answer 1

Answer-1. Correct answer is 'd'

Oligopoly is a type of market is characterized by a few large firms selling either differentiated or commodity products and having strong barriers to entry.

Answer-2. Correct answer is 'b'

The firm’s long run average cost (LAC) declines as it produces more and there is are economies of scale. the shape of LAC depends on the returns to scale. Falling long run average costs and increasing economies to scale due to internal and external economies of scales.

Answer-3. Correct answer is 'c'

Nabisco so open in its 1901 annual report about discussing its efforts to monopolize the cracker (biscuit) industry because Nabisco and other manufacturers were not subject to antitrust laws in 1901.