Reading 15- LOS a ～ Q1－4 restaurant, industry, number, amount, market

spaceedu

1.In the United States, the restaurant industry is quite competitive, with a large number of competitors each with a sizeable amount of market share. This industry is best described as:
A)    a natural monopoly, with governmental regulation necessary to ensure the quality of production.
B)    a competitive industry that is subject to social regulation because of the impact of its production on society.
C)    an inherently competitive industry, which currently does not warrant heavy government regulation.
D)    a deregulated industry, which does not require heavy government regulation because of its low barriers to entry and exit.

2.When a firm operates with the lowest cost per unit and the capacity to produce all of the industry’s output, this economic structure is best described as:
A)    an oligopoly.
B)    a competitive monopoly.
C)    a contestable market.
D)    a natural monopoly.

3.In general, the regulatory body of an industry with a natural monopoly will attempt to set industry prices at which point on the supply/demand curve?
A)    Marginal cost = demand.
B)    Marginal revenue = marginal cost.
C)    Marginal revenue = average cost.
D)    Average cost = demand.

4.A regulatory commission that seeks to have regulated companies set prices at a level that provides a reasonable profit to the companies is utilizing which of the following methods of regulation?
A)    Social regulation.
B)    Cost-of-service regulation.
C)    Rate-of-return regulation.
D)    Average cost regulation.

[此贴子已经被作者于2008-4-12 16:57:48编辑过]

spaceedu

1.In the United States, the restaurant industry is quite competitive, with a large number of competitors each with a sizeable amount of market share. This industry is best described as:
A)    a natural monopoly, with governmental regulation necessary to ensure the quality of production.
B)    a competitive industry that is subject to social regulation because of the impact of its production on society.
C)    an inherently competitive industry, which currently does not warrant heavy government regulation.
D)    a deregulated industry, which does not require heavy government regulation because of its low barriers to entry and exit.
The correct answer was C)
The industry has several large players with sizeable market share, and currently does not have any one dominant producer. It does have relatively low barriers to entry and exit, but is not a deregulated industry because that implies that it had regulations that were lifted.
2.When a firm operates with the lowest cost per unit and the capacity to produce all of the industry’s output, this economic structure is best described as:
A)    an oligopoly.
B)    a competitive monopoly.
C)    a contestable market.
D)    a natural monopoly.
The correct answer was D)
A natural monopoly is characterized by a single dominant firm within the industry that is the lowest cost producer and has sufficient capacity to meet demand.
3.In general, the regulatory body of an industry with a natural monopoly will attempt to set industry prices at which point on the supply/demand curve?
A)    Marginal cost = demand.
B)    Marginal revenue = marginal cost.
C)    Marginal revenue = average cost.
D)    Average cost = demand.
The correct answer was D)
At the point where average cost equals demand, producers would maintain profitability and consumers would pay a price somewhat lower than in an unregulated market.
4.A regulatory commission that seeks to have regulated companies set prices at a level that provides a reasonable profit to the companies is utilizing which of the following methods of regulation?
A)    Social regulation.
B)    Cost-of-service regulation.
C)    Rate-of-return regulation.
D)    Average cost regulation.
The correct answer was C)
Rate-of-return regulation seeks to allow industry participants to receive what regulators determine is a normal or fair return on their investment.