Fill in the gaps:

1. The demand curve for the firm and the industry coincide for a …………………………
2. The car industry is …………………………..
3. The corner grocer’s shop is …………………………………
4. …………………………………… output price reflects the quantity of goods it makes and sells.
5. An imperfectly competitive firm faces a ………………………………….. demand curve
6. ………………………………….. is an industry with few producers each recognizing their interdependence.
7. An industry with ……………………………. Has many sellers of products that are close substitutes for one another.
8. …………………………… is the lowest output at which a firm’s LAC curve stops falling.
9. ……………………………………. Is the market share of the largest N firms in the industry.
10. ………………………………….. is the closer integration of markets across countries
11. Globalization reflects cheaper ……………………….. , better ……………………………………… and a deliberate …………………..
of reducing cross-country barriers in order to get efficiency gains from large scale and specialization.
12. …….…………… are firms operating in many countries simultaneously. They sell in many countries at the same time.
13. ………………………………………………. describes an industry in which each firm can influence its market share to some
extent by changing its price relative to its competitors.
14. What distinguishes monopolistic competition from perfect competition is that each firm faces a
…………………………………………. demand curve while it is ……………………………….. in perfect competition.
15. …………………………………. is an explicit or implicit agreement to avoid competition.
16. The few producers (……………………………….) in an industry can maximize their total profit by setting their total
output as if they were a monopolist.
17. …………………………………. are torn between the desire to collude, in order to maximize joint profits, and the desire
to compete, in order to raise market share and profits at the expense of rivals.
18. Collusion between firms is easiest if formal agreements are …………………………..
19. Collusion between firms is easiest if formal agreements are legal. Such arrangements, called …………………………
20. …………………… it is a market in which a single firm is the lone seller of a unique product with no close substitutes.
21. …………………………….. is the sole supplier and potential supplier of the industry’s product.
22. A production process is said to have …………………………………………. If, when all inputs are changed by a given
proportion, output changes by the same proportion.
23. A production process is said to have …………………………………………. If, when all inputs are changed by a given
proportion, output changes by more than that proportion.
24. ................................. is a monopoly that results from economies of scale.
25. Because fixed costs (FC) do not increase as output increases, the ….……. will decline sharply as output increases.
26. This explains why many industries are dominated by either a single firm (…………………………………) or a small
number of firms (…………………………….).
27. The profit maximizing condition for the monopolist is like the perfectly competition where ………… = ………..
28. a monopolist can earn an economic profit if ……………………………… exceeds average total Cost (ATC) at the profit
maximizing output.
29. Price discrimination (………………………………….…) is the practice of charging different buyers different prices for the
same good or service.
30. To maximize profit, the monopolist must check whether at positive output level where MC=MR , the price
(Average revenue) covers Average variable cost (AVC) in …………………………….. and Average Total cost (ATC) in the
…………… If no, the monopolist should ………………… in the short run and ………………….. the industry in the long run.
31. When MR> MC , the monopolist should …………………………….. the output.
32. When MR=MC , this situation represents the ………………………………. output.
33. When MR< MC , the monopolist should ………………………………. the output.
34. If, in the short run, P> SAVC , the decision is to …………………………………...
35. If, in the short run, P< SAVC , the decision is to …………………………………..
36. If, in the long run P> LAC , the decision is to ………………………………… the industry.
37. If, in the long run P< LAC , the decision is to ……………………………………. the industry.
38. the measure of monopoly power is the excess of ………………………. over …………………………………….

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 # Ans. # Ans. # Ans.

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1 Pure monopoly 14 - Downward sloping 27 - Marginal revenue
- Horizontal - Marginal cost
2 Oligopoly 15 Collusion 28 Price
3 Monopolistic competition 16 Oligopolists 29 Discriminating monopoly
4 Imperfectly competitive firm 17 Oligopolists 30 - Short run
- Long run
- Shut down
- Leave
5 Downward 18 Legal 31 Raise
6 Oligopoly 19 Cartels 32 Optimal
7 Monopolistic competition 20 Pure monopoly 33 Lower
8 Minimum efficient scale 21 Monopolist 34 Produce
9 The N firm Concentration ratio 22 Constant return to scale 35 Shut down
10 Globalization 23 Increasing return to scale 36 Stay
11 - Transport cost 24 Natural monopoly 37 Leave
- Information technology
- Policy
12 Multinationals 25 Average total cost (ATC) 38 - Price
- Marginal cost
13 Monopolistic competition 26 - Monopoly
- Oligopoly