ENV320 FINAL COMPREHENSIVE STUDY GUIDE 2026 FULL
QUESTIONS AND SOLUTIONS GRADED A+
● Monopoly. Answer: · Single seller dominates the market, no close substitutes · Seller
controls the price, no competition · High barriers of entry & exit because the industry is capital
intensive · Firm is a price maker (Ex: electricity, railways, water)
● Major barriers to entry in a monopoly. Answer: · the firm already has resources. cost
advantages of more expertise and scale of production, making production per unit cheaper
● Monopolostic Competition. Answer: · a market structure in which many companies sell
products that are similar but not identical. NOT price takers (perfectly elastic), no barriers to
entry, competitive market
● Oligopoly. Answer: · A few large firms generally dominate the market, close substitutes of
goods · The competition in the market determines the price & keeps the competitor's actions
in mind, high competition · High barrier of entry because of the economies of scale in the
industry · Firm is a price taker (Ex: commercial air travel - southwest, delta, united, &
American)
● Major barriers to entry in an oligopoly. Answer: · Some barriers include legal
implications, high entry costs, and a large platform
● Perfect competition. Answer: · Many sellers in the market, lots of options, all firms sell an
identical product · Easy to enter and exit · The price is determined by the market, firms have
no control, price takers
● Price in a perfect competition. Answer: · Price = marginal revenue
● Monopoly vs. Perfect Competition. Answer: · monopoly higher priced, less produced,
price maker · perfect competition more produced and the price is given by market, price taker
● Profit maximization rule. Answer: · produce at that rate of output where marginal revenue
equals marginal cost · mr=mc
● What is the break-even point?. Answer: · when total revenue = total cost · the price of the
good = average total cost · profit is zero
QUESTIONS AND SOLUTIONS GRADED A+
● Monopoly. Answer: · Single seller dominates the market, no close substitutes · Seller
controls the price, no competition · High barriers of entry & exit because the industry is capital
intensive · Firm is a price maker (Ex: electricity, railways, water)
● Major barriers to entry in a monopoly. Answer: · the firm already has resources. cost
advantages of more expertise and scale of production, making production per unit cheaper
● Monopolostic Competition. Answer: · a market structure in which many companies sell
products that are similar but not identical. NOT price takers (perfectly elastic), no barriers to
entry, competitive market
● Oligopoly. Answer: · A few large firms generally dominate the market, close substitutes of
goods · The competition in the market determines the price & keeps the competitor's actions
in mind, high competition · High barrier of entry because of the economies of scale in the
industry · Firm is a price taker (Ex: commercial air travel - southwest, delta, united, &
American)
● Major barriers to entry in an oligopoly. Answer: · Some barriers include legal
implications, high entry costs, and a large platform
● Perfect competition. Answer: · Many sellers in the market, lots of options, all firms sell an
identical product · Easy to enter and exit · The price is determined by the market, firms have
no control, price takers
● Price in a perfect competition. Answer: · Price = marginal revenue
● Monopoly vs. Perfect Competition. Answer: · monopoly higher priced, less produced,
price maker · perfect competition more produced and the price is given by market, price taker
● Profit maximization rule. Answer: · produce at that rate of output where marginal revenue
equals marginal cost · mr=mc
● What is the break-even point?. Answer: · when total revenue = total cost · the price of the
good = average total cost · profit is zero
