Exam 3 Econ
(Figure 24.1) The profit-maximizing monopolist will charge a price of
A
Which of the following is characteristic of a perfectly competitive market?
A large number of firms
(Figure 23.5) A perfectly competitive firm will maximize profits by producing the level of output that corresponds to point
B
(Figure 24.1) The profit-maximizing rate of output is
F
Which of the following is true about a competitive market supply curve?
It is the sum of the marginal cost curves of all the firms
Which of the following rules is satisfied when a monopoly maximizes profits
MR=MC
Monopolists are price
Makers, but competitive firms are price takers.
A firm should shut down production when:
P < minimum AVC
For a perfectly competitive market, long-run equilibrium is characterized by all of the following but which one?
P=maximum ATC
Which of the following may characterize monopoly
Substantial market power.
If a new sushi restaurant opens, then
The market supply curve for sushi will shift to the right.
Which of the following is likely to be a monopolist
a drug firm that has a patent granting it the exclusive right to produce a drug
In a competitive market where firms are earning economic profits, which of the following should be expected as the industry moves to long-run equilibrium, ceteris paribus?
a lower price and more firms
If all of your friends use the same instant messaging service provider, you are likely to use it too. This behavior may create
a network economy
Which of the following is a common barrier to entry in a monopoly market
a patent on a new product
If economic profits are earned in a competitive market, then over time
additional firms will enter the market
Which of the following is not a determinant of market power
age of industry
The price charged by a profit-maximizing monopolist occurs
at a price on the demand curve above the intersection where MR=MC
(Figure 23.6) For a perfectly competitive firm, given the current market price, we expect to see
exit from this industry
If a firm can change market prices by altering its output, then it
has market power
If a firm in an oligopoly expands its market share at prevailing prices, its competitors
lose market share
In a monopoly and perfect competition, a firm should expand production when
marginal revenue is above marginal cost
The demand curve will be kinked if rival oligopolists
match price reductions but not price increases
Which of the following may not characterize an oligopoly
no market power
The concentration ratio for an oligopoly is considered
over 60 percent
The pricing strategy in which there is an explicit agreement among producers regarding price is called
price-fixing
For a monopolist, marginal revenue equals
the change in total revenue divided by the change in quantity
If the price of ricotta cheese, an ingredient in lasagna, increases, then
the market supply curve for lasagna will shift to the left
(Figure 24.1) The shaded area represents
total profit
(Figure 23.5) If a perfectly competitive firm produces the level of output corresponding to point B, it will earn
zero economic profit
Which of the following is characteristic of a perfectly competitive market?
zero economic profit in the long run
