micro 12,13,14

At the profit-maximizing level of short-run output, this monopolistically competitive firm will be making a profit of

$525

Refer to the demand and cost data for a pure monopolist given in the table. If the monopolist perfectly price-discriminated and sold each unit of the product at the maximum price the buyer of that unit would be willing to pay, and if the monopolist sold 4 units, then total revenue would be

$900

If the industry depicted in this graph were purely competitive, the output quantity would be

160

For a monopolist to sell an output level of 10 units, the price must be $8. MR at this output level will be

< $8

Which is the best example of price discrimination?

A telephone company charging lower rates to weekend users than weekday users

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how many units will the firm produce?

4

"Price makers" refers to firms that

Face a downward-sloping demand curve

The payoff matrix represents

a positive-sum game.

In the long run, a profit-maximizing monopolistically competitive firm sets it price

above marginal cost.

Refer to the above graph of a representative firm in monopolistic competition. If curve (2) represents ATC and line (3) represents demand, then we can conclude that the industry

is in long-run equilibrium.

The following pairs of products illustrate product differentiation, except

tank tops and denim shorts.

Assume that an industry is significantly affected by import competition from foreign suppliers. Taking this factor into account, it would mean that

the industry is less concentrated than suggested by domestic concentration ratios.

Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit from either opening a coffee shop in a small town or not opening the coffee shop. If the firms are playing a sequential game, then

there are two potential Nash equilibriums for this game.

A firm will earn economic profits whenever:

Average revenue exceeds average total costs

One feature of pure monopoly is that the demand curve

slopes downward.

A strategy that is better than any alternative strategy —regardless of what the other firm does— is called a

Dominant strategy

The highest possible value of the Herfindahl index is 1,000.

False

An exclusive legal right as sole producer for 20 years granted to an inventor of a product is called a

Patent

Answer the question based on the payoff matrix for a duopoly, in which the numbers indicate the profit from following either an international strategy or a national strategy. Which of the following is true?

The national strategy is the dominant strategy for both firms.

As firms exit from a monopolistically competitive industry in the long run, the remaining firms' profits will begin to rise.

True

In order to maximize profits, the monopolist will produce the output level where MR = MC and charge a price equal to MR and MC.

True

Which would make it easier to maintain an effective collusive agreement in a cartel?

a decrease in the elasticity of demand for the cartel's product

A majority distinction between a monopolistically competitive firm and an oligopolistic firm is that

a recognized interdependence exists between firms in one industry but not in the other

The industry characterized by these data is

an oligopoly

The variety of products and features that consumers may choose from in monopolistically competitive industries

at least partially offsets the economic inefficiencies of this market structure.

If monopolistically competitive firms in an industry are making an economic profit, then new firms will enter the industry and the product demand facing existing firms will

decrease

In the long run, a representative firm in a monopolistically competitive industry will end up

earning a normal profit, but not an economic profit.

The Herfindahl index

gives much greater weight to larger firms than to smaller firms in an industry.

Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. If Firm A adopts the low-price strategy, then Firm B would adopt the

high-price strategy and earn $200

Under which of the following conditions would a profit-maximizing monopolist necessarily raise price?

if marginal cost was greater than marginal revenue

The quantitative difference between areas Q 1 bcQ 2 and P 1 P 2 ba in the diagram measures

marginal revenue.

In long-run equilibrium, a monopolistically competitive producer achieves

neither productive efficiency nor allocative efficiency.

One major barrier to entry under pure monopoly arises from

ownership of essential resources.

At the profit-maximizing level of output for a monopolist,

price is greater than marginal cost.

For a monopolistically competitive firm in long-run equilibrium,

price will equal average total cost.

Suppose that a pure monopolist can sell 5 units of output at $4 per unit and 6 units at $3.90 per unit. The monopolist will produce and sell the sixth unit if its marginal cost is

$3.40 or less.

If columns 1 and 3 are this firm's demand schedule, maximum economic profit will be

$80

Refer to the diagrams. With the industry structures represented by diagram

(A), there will be only a normal profit in the long run, while in (B) an economic profit can persist.

The profit-maximizing level of output will be

5 units

Which case best represents a case of price discrimination?

A major airline sells tickets to senior citizens at lower prices than to other passengers.

Refer to the above graphs. The long-run equilibrium for a monopolistically competitive firm is represented by graph

B

Monopolists are said to be allocatively inefficient because

at the profit-maximizing output, the marginal benefit of the product to society exceeds its marginal cost.

The monopolistic competition model assumes that

firms will engage in nonprice competition

One inherent factor that tends to destroy collusion among oligopolists is the

incentive to cheat.

When a firm is on the inelastic segment of its demand curve, it can

increase profits by increasing price.

A monopolistically competitive firm is producing at a short-run output level where average total cost is $10.00, marginal cost is $5.00, marginal revenue is $6.00, and price is $12.00. In the short run, the firm should

increase the level of output.

Refer to the long-run cost curve for a firm. If the firm produces output Q 1 at an average total cost of ATC 1, then the firm is

incurring X-inefficiency and is failing to realize all existing economies of scale.

"Variety is the spice of life" is best applied to which market structure

monopolistic competition

Refer to the diagram. If this somehow was a costless product (that is, the total cost of any level of output was zero), the firm would maximize profits by

producing Q2 units and charging a price of P2.