CXC - Caribbean Examinations Council Economics: Market Structures Flashcards
6 cards from real CXC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CXC - Caribbean Examinations Council Economics: Market Structures flashcards as text
Which of the following is a feature of perfect competition?
Answer: All firms are price takers selling homogeneous products
Perfect competition requires many sellers, homogeneous products, and no barriers to entry, meaning every firm must accept the prevailing market price.
How does a monopoly determine its profit-maximizing level of output?
Answer: By producing where marginal revenue equals marginal cost
Like all profit-maximizing firms, a monopoly produces where marginal revenue equals marginal cost (MR = MC).
What is price discrimination?
Answer: Charging different prices to different customers for the same good
Price discrimination involves a firm charging different prices to different consumers for the same product based on their willingness to pay.
The kinked demand curve model is used to explain price rigidity in which market structure?
Answer: Oligopoly
The kinked demand curve model explains why oligopolists tend to keep prices stable, since rivals match price cuts but not price increases.
Which term describes the situation where a firm earns just enough revenue to cover all its costs, including normal profit?
Answer: Breakeven point
The breakeven point is where total revenue equals total cost, meaning the firm covers all expenses including the opportunity cost of the owner's investment.
What is the significance of the CXC CAPE Economics examination for Caribbean students?
Answer: It provides a regionally recognized qualification that is accepted at universities across the Caribbean and internationally
CAPE Economics is a CXC advanced-level qualification recognized by universities throughout the Caribbean and internationally, providing pathways to higher education.