Exam 3

which of the following statements is NOT a reason why a monopolist does not have a supply curve

a monopoly firm is a "price-taker", not a "price-maker"

a firm that exits its market has to pay

neither its variable costs nor its fixed costs

a firm cannot price discriminate if it

operates in a competitive market

the marginal revenue curve for a monopoly firm starts at the same point on the vertical axis as the

(i and iii) average revenue curve and demand curve

which of the following statements is correct

assuming that implicit costs are positive, accounting profit is greater than economic profit

a monopolist maximized profits by

both a and b (producing an output level where marginal revenue equals marginal costs, and charging a price that is greater than marginal revenue)

becca's butter company sells butter to a broker in Oklahoma City. Because the market for butter is generally considered to be competitive, Becca's butter company

can choose quantity of butter that it produces but not the price at which it sells its butter

a monopolist is able to perfectly price discriminate

consumer surplus and deadweight losses are transformed into monopoly profits

if a monopolist is able to perfectly price descriminate

consumer surplus and deadweight losses are transformed into monopoly profits

which of the following expressions is correct

economic profit = accounting profit - implicit costs

which of the following statements is NOT correct

economies of scale occur when a firm's long-run average total costs are increasing as output increases

which of the following statements is NOT correct (ATC)

for a U-shaped average total cost (ATC) curve, when the marginal cost curve is below the average total cost curve, the average total cost must be rising

which of the following statements is NOT correct

for a firm in a perfectly competitive market, P = AR > MR = MC

for a perfectly competitive market

if existing firms earn positive economic profits, new firms enter, short run market supply shifts right, price falls reducing profits and slowing entry

the competitive firm's short-run supply curve is its

mar marginal cost curve, but only the portion above the minimum of average variable costs

price discrimination requires the firm to

separate customers according to their willingness to pay

if a firm increases its level of production and lower its average total costs of production at the same time then

the firm has a excess capacity

suppose that a competitive market is initially in equilibrium. Then demand increases. If entering firms face the same costs as existing firms and sufficient resources are available for entering firms

the long-run market supply curve will be perfectly elastic

all of the follow statements are correct except

when the marginal product for an input declines as the quantity of that input increases, the production function exhibits diminishing marginal products