Whether each of the following is a characteristic of perfect competition , monopolistic competition , oligopoly, and/or monopoly : A large number of sellers Product is a commodity Advertising by firms Barriers to entry Firms are price makers Concept Introduction : Perfect Competition : Perfect Competition describes a market structure in which the number of buyers and sellers is very large, and the competition among sellers is at its greatest possible level. Monopolistic Competition : Monopolistic competition is a type of competition where producers offer products that are differentiated from one another (e.g. by quality). Oligopoly : Oligopoly refers to a market which is dominated by a small number of large sellers (oligopolists). Oligopoly has its own market structure. Monopoly : Monopoly refers to a market structure where there is a single seller who is engaged in selling a unique product in the market.

Question

Use a Eviews software to develop the residual diagnostic on: 1) Autocorrelation (Topic 6) a) Explain what is Autocorrelation b) Explain how to remove the Autocorrelation c) Report the result on Durbin Watson test before and after consider the lag dependent variable d) Report the result on Breusch-Godfrey Serial Correlation LM test before and after consider the lag dependent variable e) Interpret the result

Answer 1

Question

Chapter 10, Problem 4.12PA

To determine

Whether each of the following is a characteristic of perfect competition, monopolistic competition, oligopoly, and/or monopoly:

A large number of sellers

Product is a commodity

Advertising by firms

Barriers to entry

Firms are price makers

Concept Introduction:

Perfect Competition: Perfect Competition describes a market structure in which the number of buyers and sellers is very large, and the competition among sellers is at its greatest possible level.

Monopolistic Competition: Monopolistic competition is a type of competition where producers offer products that are differentiated from one another (e.g. by quality).

Oligopoly: Oligopoly refers to a market which is dominated by a small number of large sellers (oligopolists). Oligopoly has its own market structure.

Monopoly: Monopoly refers to a market structure where there is a single seller who is engaged in selling a unique product in the market.

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Use a Eviews software to develop the residual diagnostic on: 1) Autocorrelation (Topic 6) a) Explain what is Autocorrelation b) Explain how to remove the Autocorrelation c) Report the result on Durbin Watson test before and after consider the lag dependent variable d) Report the result on Breusch-Godfrey Serial Correlation LM test before and after consider the lag dependent variable e) Interpret the result

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