Econ Chapter 14

Refer to the graph shown of average costs for a typical firm. If there were two firms each producing 500 units, per-unit costs would be:

$8.

If P = Q/15 represents market supply for a competitive industry and market demand is given by Qd = 500 - 10 P, the equilibrium price is:

20

Refer to the graph shown. Assuming that the monopoly maximizes profit, the social cost of monopoly will be:

20,000

Refer to the graph shown. If this monopolist were allowed to choose the profit-maximizing level of output, it would produce:

200 units of output

Refer to the graph shown. If this monopolist were forced to set price equal to average cost, it would charge a price of:

3

Refer to the graph shown. The short-run equilibrium output level for the monopolistically competitive firm represented is:

300

Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of personal computers in the country of Oz. If the marginal cost of producing computers is $1,000 no matter how many are produced and the monopolist seeks to maximize profit, it should set the price of computers at:

3000

If MC = Q/15 represents marginal cost for a monopolist and market demand is given by Qd = 500 - 10 P, the monopolist maximizes profit by setting price equal to:

31.25

Refer to the graph shown. If this monopolist were allowed to choose the profit-maximizing level of output, it would produce:

400

Refer to the graph shown. Assuming that the monopoly maximizes profit, it will earn profits of:

40000

Refer to the graph shown. In a perfectly competitive industry, price would:

=12

The price at which a monopolistic competitor sells its product in both the long run and the short run is equal to:

Average Revenue

If the demand curve is curve D for a monopoly, the marginal revenue curve is:

B

Refer to the graph shown of average costs for a firm. This firm exhibits:

Economies of scale

Refer to the graph shown. If this monopolist produces 45 units of output per day, it will:

be able to increase profit by producing less per day.

Refer to the graph shown. If this monopolist produces 700 units of output per day, it:

can increase profit by producing less.

Refer to the graph shown. If this monopolistically competitive firm maximizes profit, it will:

charge 85 per dress

A purpose of advertising is to make the:

demand for one's product more inelastic.

Price exceeds marginal cost for a monopolistically competitive firm in long-run equilibrium because:

demand is not perfectly elastic.

A natural monopoly occurs when a monopoly:

exists because significant economies of scale are present.

n the absence of economies of scale, advertising and product differentiation:

have an uncertain effect on welfare because they increase both average total cost and product variety.

Refer to the graph shown. At an output of a, the monopolist should:

increase output to increase profits.

There are many restaurants in a city, each one offering food and services that differ from those of its competitors. There is also free entry of sellers into the market, and each seller serves a very small fraction of the total number of meals served each day. The restaurant industry in Raleigh is best categorized as:

monopolistically competitive.

A market structure in which one firm makes up the entire market is:

monopoly

For a monopolistic competitor:

p=atc in longrun

Long-run equilibrium for firms in monopolistically competitive industries is similar to that for firms in perfect competition in that:

price = atc

iTunes charges British customers 20 percent more than customers in France and Germany. Apple defended the price differential, saying that the "underlying economic model in each country has an impact on how we price our track downloads." An economist would say that Apple is engaged in:

price discrimination.

Refer to the graph shown of average costs for a typical firm. If this industry consisted of one firm producing 1,000 units and one firm producing 500 units:

the smaller firm probably would be forced out through price competition.

Monopolies that exist because economies of scale create a barrier to entry are called natural monopolies.

true