AGEC Exam 2 Study Guide 2026 | Complete Review, Practice Questions &
Exam Prep
Which of the following is NOT one of the three primary determinants of market structure?
a. Barriers to entry or exit
b. Product differentiation
c. Degree of Institutional involvement
d. Number and relative size of buyers and sellers - ANS ✔✔Degree of Institutional involvement
All of the following would be considered third degree price discrimination except:
a. Booking a motel room early to ensure a discount
b. Grandparents getting a "Seniors Discount" at an amusement park
c. Getting a bulk-quantity discount as a member of a warehouse club
d. Scheduling a weekend stayover to get a discount on airline tickets - ANS ✔✔Getting a bulk-
quantity discount as a member of a warehouse club
A market characterized by a situation where certain buyers and sellers have some control over
price leading to inefficiencies in terms of costs to consumers is best defined as: - ANS
✔✔Imperfect Competition
Which market structure shown below would be expected to minimize consumer surplus? - ANS
✔✔Monopoly
Which market structure shown below is expected to provide the lowest price and highest
quantity? - ANS ✔✔Perfectly Competitive
, Which of the following is the primary determinant for ensuring long-run economic profit for a
monopoly?
a. Differentiated product
b. Significant barriers to entry
c. Ability to be a "price-maker"
d. Efficiency of the operations - ANS ✔✔Significant barriers to entry
Which of the following is the primary reason an oligopoly is not a pure price maker?
a. Strategy
b. Interdependence
c. Product Differentiation - ANS ✔✔Interdependence
A kinked-demand curve illustrates the reason monopoly markets tend to see more stable prices
and why competitors maximize total revenue by following a competitor's price decrease. - ANS
✔✔False
Of the following, which is the best example of a "price-taker"? a. A GMO corn breeder
b. A U.S. wheat producer
c. A fast food franchise
d. A brand-name gas station - ANS ✔✔A U.S. wheat producer
Market share of an industry or product is more important than size of a firm in determining
market power - ANS ✔✔True
A thin market is one which has few buyers, few sellers and limited number of transactions,
making the price discovery process more challenging. - ANS ✔✔True
The primary component of a successful price discovery system using formula pricing is:
Exam Prep
Which of the following is NOT one of the three primary determinants of market structure?
a. Barriers to entry or exit
b. Product differentiation
c. Degree of Institutional involvement
d. Number and relative size of buyers and sellers - ANS ✔✔Degree of Institutional involvement
All of the following would be considered third degree price discrimination except:
a. Booking a motel room early to ensure a discount
b. Grandparents getting a "Seniors Discount" at an amusement park
c. Getting a bulk-quantity discount as a member of a warehouse club
d. Scheduling a weekend stayover to get a discount on airline tickets - ANS ✔✔Getting a bulk-
quantity discount as a member of a warehouse club
A market characterized by a situation where certain buyers and sellers have some control over
price leading to inefficiencies in terms of costs to consumers is best defined as: - ANS
✔✔Imperfect Competition
Which market structure shown below would be expected to minimize consumer surplus? - ANS
✔✔Monopoly
Which market structure shown below is expected to provide the lowest price and highest
quantity? - ANS ✔✔Perfectly Competitive
, Which of the following is the primary determinant for ensuring long-run economic profit for a
monopoly?
a. Differentiated product
b. Significant barriers to entry
c. Ability to be a "price-maker"
d. Efficiency of the operations - ANS ✔✔Significant barriers to entry
Which of the following is the primary reason an oligopoly is not a pure price maker?
a. Strategy
b. Interdependence
c. Product Differentiation - ANS ✔✔Interdependence
A kinked-demand curve illustrates the reason monopoly markets tend to see more stable prices
and why competitors maximize total revenue by following a competitor's price decrease. - ANS
✔✔False
Of the following, which is the best example of a "price-taker"? a. A GMO corn breeder
b. A U.S. wheat producer
c. A fast food franchise
d. A brand-name gas station - ANS ✔✔A U.S. wheat producer
Market share of an industry or product is more important than size of a firm in determining
market power - ANS ✔✔True
A thin market is one which has few buyers, few sellers and limited number of transactions,
making the price discovery process more challenging. - ANS ✔✔True
The primary component of a successful price discovery system using formula pricing is:
