AP micro ch 12-15

Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service. Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price?

if jason raises his price, he would lose all his customers

If a perfectly competitive firm's price is above its average total cost, the firm

is earning a profit

For a monopolistically competitive firm, marginal revenue

is less than price

in a monopolistic competition there is/are

many sellers who each face a downward-sloping demand curve

the reason the coffee house market is monopolistically competitive rather than perfectly competitive is because

products are differentiated

In perfect competition

the market demand curve and the individual's demand are identical

If the market price is $25, the average revenue of selling five units is

$125

if the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is

$25

for a perfectly competitive firm, which of the following is NOT true at profit maximization? a. market price is greater than marginal cost b. marginal revenue equals marginal cost c. price equals marginal cost d. total revenue minus total cost is maximized

A

which of the following is a characteristic of a monopoly? a. there is only one seller in the market b. the product is not unique c. it is easy for new firms to enter the market d. the firm has no control over price

A

which of the following is a characteristic of an oligopolistic market structure? a. each firm need not react to the actions of rivals b. each firm sells a unique product c. it is easy for new firms to enter the industry d. there are few dominant sellers

A

which of the following is NOT a characteristic of a perfectly competitive market structure? a. all firms sell identical products b. there are a very large number of firms that are small compared to the market c. there are no restrictions to entry by new firms d. there are restrictions on exit of firms

D