Microeconomic exam 3
concentration ratios measure the - geographic location of the largest corporation in each industry - the degree to which product price exceeds the marginal cost in various industries - % of total industry sales accounted for by the largest firm in the industry - # of firms in an industry
% of total industry sales accounted for by the largest firm in the industry
the long run equilibrium position of the monopolistically competitive firm occurs at a point where average costs are - constant - increasing - decreasing - at their min. pt
- decreasing
In the U.S market, people often refer to the "big three" in autos and the "big four" in accounting. these terms suggest that these two industries are - purely competitive - monopolistically competitive - monopolies -oligopolies
-oligopolies
a constant cost industry is one in which - a higher price per unit will not result in an increased output - 100 units can be produced for 100 then 150 can be produced for 150, 200 for 200 and so forth - the demand curve and therefore the unit price and quantity sold seldom change - the total cost of producing 200 or 300 units is no greater than the cost of producing 100 units
100 units can be produced for 100 then 150 can be produced for 150, 200 for 200 and so forth
for a monopolist to sell an output level of 10 units, the price must be $8. MR at this output level will be - >8 and <16 - <8 =8 >16
<8
which of the following is a measure of the degree of industry concentration - dow jones industrial average - Herfindahl index - employment cost - S&P 500 index
Herfindahl index
which of the following is correct for a monopolistically competitive firm in long-run equilibrium - MC= ATC -MC exceeds MR -P exceeds minimum ATC -P=MC
P exceeds minimum ATC
the characteristic most closely associated w/ oligopoly is - easy entry into the industry - a few large producers - product standardization - no control over price
a few large producers
a breakdown in price leadership leading to successive rounds of price cuts is known as - limit pricing -a price war - informal pricing - price discrimination
a price war
which of the following characteristics of pure monopoly - close substitute products - barriers to entry - the absence of market power - "price taking"
barriers to entry
in the long run, a profit-maximizing monopolistically competitive firm sets its price - above marginal cost - below marginal cost - equal to marginal revenue - equal to marginal cost
above marginal cost
in competing with rivals, oligopolistic firms will tend to use - price cuts bc they do not add to costs like advertising - advertising bc it is less easily duplicated than price cuts - collusion bc it is a legal way to increase market share - price war bc they will increase the profit
advertising bc it is less easily duplicated than price cuts
in competing with rivals, oligopolistic firms will tend to use - price cuts bc they do not add to costs like advertising - advertising bc its less easily duplicated than price cuts - collusion bc it is a legal way to increase market shares - price war bc they will increase the profit of firms
advertising bc its less easily duplicated than price cuts
nonprice competition refers to - competition between products of different industries, for example, competition between aluminum and steel in the manufacture of automobile parts - price increases by a firm that are ignored by its rivals - advertising, product promotion, and change in the real or perceived characteristics of a product - reduction in production costs that are not reflected in a price reduction
advertising, product promotion, and change in the real or perceived characteristics of a product
the economic inefficiency in an oligopoly may be reduced by the following except - increased competition for foreign producers - limit pricing due to potential entrants - economic profits are used to fund technological advance - aggressive advertising by rivals
aggressive advertising by rivals
the economic inefficiency in an oligopoly may be reduced by the following, except - increased competition from foreign producers - limit pricing due to potential entrants - economic profits are used to fund technological advance - aggressive advertising by rivals
aggressive advertising by rivals
the economic inefficiency in an oligopoly may be reduced by the following, except - increased competition from foreign producers - limit pricing due to potential entrants - economic profit used to fund technological advance - aggressive advertising by rivals
aggressive advertising by rivals
(consider this) in wendys 1987 commercial depicting a soviet fashion show, one objective was to portray Mcdonald's and Burger Kings products - all the same and not very appealing - produced inefficiently - unpredictable in terms of features and quality - only appealing to old women
all the same and not very appealing
the long run supply curve would be perfectly elastic when - an increase in demand does not cause a change in the product price - an increase in demand does not cause a change in the product price - an increase in demand causes an increase in the product price - a decrease in demand causes an increase in short-run supply - a decrease in demand causes an increase in the product price
an increase in demand does not cause a change in the product price
an increasing cost industry is associated with - a perfectly elastic long-run supply curve - an upsloping long-run supply curve - a perfectly inelastic long-run supply curve - an upsloping long-run demand curve
an upsloping long run supply curve
if the output is set at the kink of the kinked demand model, then there - is a strong incentive for rivals to decrease prices - is a strong incentive for rivals to increase prices - is one price at which marginal revenue equals marginal cost - are several prices at which marginal revenue equals marginal cost
are several prices at which marginal revenue equal marginal cost
if the output is set at the kink of the kinked-demand model, then there - is a strong incentive for rivals to decrease price - is a strong incentive for rivals to increase the price - is one price at which marginal revenue equals marginal cost - are several prices at which marginal revenue equals marginal cost
are several prices at which marginal revenue equals marginal cost
the variety of products and features that consumers may choose from in the monopolistically competitive industries - at least partially offset the economic inefficiencies of this market structure - leads to an optimal allocation of resources in the market structure - guarantees that firms product at the full capacity output level - makes the demand curves facing firms in these industries perfectly elastic
at least partially offset the economic inefficiencies of this market structure
which of the following is a characteristic of pure monopoly - close substitute products -barriers to entry - the absence of market power - "price taking"
barriers to entry
a firm in an oligopoly is similar to a monopoly in that - both firms do not face competition from others - both firms could have significant market power and control over price - both firms face very inelastic demand for their product - both firms do not need to advertise
both firms could have significant market power and control over price
game theory can be used to demonstrate that oligopolists - rarely consider the potential reactions of rivals - experience economies of scale - can increase their profit through collusion - may be either homogeneous or differentiated
can increase their profit through collusion
assume a pure monopolist is currently operating at a price-quantity combination on the inelastic segment of its demand curve. if the monopolist is seeking max. profit, it should - retain its current price-quantity combination - increase both price and quantity sold - charge a lower price - charge a higher price
charge a higher price
if a monopolist engages in price discrimination, it will - realize a smaller profit - charge a higher price where individual demand is inelastic and a lower price where individual demand is elastic - produce a smaller output than when it did not discriminate - charge a competitive price to all its customers
charge a higher price where individual demand is inelastic and a lower price where individual demand is elastic
when firms in an industry reach an agreement to fix prices, divide up market share, or otherwise restrict competition, they are practicing the strategy of - interindustry competition - limit pricing - price leadership - collusion
collusion
which of the following would not be expected to occur in a purely competitive market in long-run equilibrium - consumer and producer surplus will be minimized - P=MC=lowest ATC - the max. willingness to pay for the last unit (=) the min. acceptable price for that unit - we would expect all of these to occur in the long run in a purely competitive market
consumer and producer surplus will be minimized
the process by which new firms and new products replace existing dominant firms and products is called - monopolistic competition -mergers and acquisitions - process innovation - creative destruction
creative destruction
assume the market for ball bearing is purely competitive. currently, each of the firms in this market is earning positive economic profit. in the long run, as adjustments occur in the industry, we can expect the market price of ball bearing to - increase and individual firm profit to decrease increase and individual firm profit to increase - decrease and individual firm's profit to increase - decrease and individual firm's profit to decrease
decrease and individual firm's profit to decrease
the automobile, household appliance, and automobile tire industries are all illustrations of - homogeneous oligopoly - monopolistic competition - pure monopoly - differentiated oligopoly
differentiated oligopoly
the price elasticity of a monopolistically competitive firm's demand curves varies - inversely with the number of competitors and the degree of product differentiation - directly with the number of competitors and the degree of product differentiation - directly with the number of competitors but inversely with the degree of product differentiation - inversely with the number of competitors but directly with the degree of product differentiation
directly with the number of competitors but inversely with degree of product differentiation
in the long run, a representative firm in a monopolistically competitive industry will end up - having an elasticity of demand that will be less than it was in the short run - having a larger number of competitors than it will in the short run - producing a level of output at which marginal cost and price are equal - earning a normal profit, but not an economic profit
earning a normal profit, but not an economic profit
when a pure monopolist is producing its profit-maximizing output, the price will - be less than MR - equal neither MC nor MR - equal MR -equal MC
equal neither MC nor MR
if there is a decrease in demand for a product in a purely competitive industry, it results in an industry contraction that will end when the product price is - greater than its marginal cost - equal to its marginal cost - less than its marginal cost - greater than its average cost
equal to its marginal cost
if there is a decrease in demand for a product in a purely competitive industry, it results in an industry contraction that will end when the product price is - greater than its marginal cost - equal to its marginal cost - less than its marginal cost -greater than its average cost
equal to its marginal cost
consumers who clip and redeem discount coupons - exhibit the same price elasticity of demand for a given product as consumers who do not clip and redeem coupons - exhibit a higher price elasticity of demand for a given product than consumers who do not clip and redeem coupons - exhibit a lower price elasticity of demand for a given product than consumers who do not clip and redeem coupons - cause total revenue to decrease for firms that issue coupons for their products
exhibit a higher price elasticity of demand for a given product than consumers who do not clip and redeem coupons
monopolistic competition is characterized by excess capacity bc - firms are always profitable in the long run - firms charge a price that is greater than the marginal cost - firms produce at an output level less than the least cost output - the demand for the product is perfectly elastic in this type of industry
firms produce at an output level less than the least cost output
a significant difference between a monopolistically competitive firm and a purely competitive firm is that the - the former does not seek to maximize profit - latter recognizes that price must be reduced to sell more output - former sells similar, although not identical, products - formers demand curve is perfectly inelastic
former sells similar, although not identical, products
a significant benefit of monopolistic competition compared with pure competition is - less likelihood of x- inefficiency - improves resources allocation - greater product variety - stronger incentives to achieve economies of scale
greater product variety
which of the following statement is true for a long-run supply curve that slopes upward - if the total market output is increased, unit costs of production increase - if the total market output is unchanged, unit costs of production increase - the total cost of producing 15 units is no larger than the cost of producing 10 units -if the total market output is decreased, total costs of production will remain unchanged
if the total market output is increased, unit costs of production increase
which of the following statements is true for a long-run supply curve that slopes upward? - if the total market output is increased, unit costs of production increase - if the total market output is unchanged, unit costs of production increase - the total cost of producing 15 units is no larger than the cost of producing 10 units - if the total market output is decreased, total costs of production will remain unchanged
if the total market output is increased, unit costs of production increase
the MR = MC rule applies - in the short run but not in the long run - in the long run but not in the short run - in both the short run and the long run - only to a purely competitive firm
in both the short run and the long run
the MR=MC rule applies - in the short run but not in the long run - in the long run but not in the short run - in both the short run and the long run - only to a purely competitive firm
in both the short run and the long run
which of the following is true concerning purely competitive industries - there will be economic loss in the long run bc of cut-throat competition - economic profit will persist in the long run if consumers demand is strong and stable - in the short run, firms incur economic losses or earn an economic profit, but in the long run, they earn a normal profit - there are economic profits in the long run but not in the short run
in the short run, firms incur economic losses or earn an economic profit, but in the long run, they earn a normal profit
advertising can impede economic efficiency when it - increase entry barriers -reduces brand loyalty - enables the firm to achieve substantial economies of scale - increase consumer awareness of substitute product
increase entry barriers
w/ a natural monopoly, the fair return price - is allocatively efficient, the socially optimal price is allocatively inefficient - is allocatively inefficient, the socially optimal price is allocatively efficient - and the socially optimal price are both allocatively inefficient - and the socially optimal price are both allocatively efficient
is allocatively inefficient, the socially optimal price is allocatively efficient
with a natural monopoly, the fair return price - is allocatively efficient, the socially optimal price is allocatively inefficient - is allocatively inefficient, the socially optimal price is allocatively efficient - and the socially optimal price are both allocatively inefficient - and the socially optimal price are both allocatively efficient
is allocatively inefficient, the socially optimal price is allocatively efficient
the demand curve faced by a pure monopolist - maybe either more or less elastic than that faced by a single purely competitive firm - is less elastic than that faced by a single purely competitive firm - has the same elasticity as that faced by a single purely competitive firm - is more elastic than faced by a single purely competitive firm
is less elastic than that faced by a single purely competitive firm
a nondiscriminating monopolist will find that marginal revenue - exceeds average revenue or price - is identical to the price - is sometimes greater and sometimes less than the price - is less than average revenue or price
is less than average revenue or price
collusive agreements between two firms are most likely to be honored when the game - is a one-time game w/ the opportunity for a prisoner's dilemma - has a nash equilibrium that differs from the outcome that maximizes the payoffs to the two firms - is a zero-sum game - is repeated and both firms offer credible threats if the other violates the agreement
is repeated and both firms offer credible threats if the other violates the agreement
( last word ) Big Data - has completely eliminated the monopoly pricing power of online retailers - is used by firms to price discriminate through personalized pricing - is a significant barrier to entry to new internet retailers - make it easier for government to regulate monopolistic industries
is used by firms to price discriminate through personalized pricing
competitive firms will always try to earn more than a normal profit by doing the following except - adopting better production tech - improving the business org. and operation - developing new products - raising the price of their existing products
raising the price of their existing products
( last word) "big data" - has completely eliminated the monopoly pricing power of online retailers - is used by firms to price discriminate through personalized pricing is a significant barrier to entry to new internet retailers - makes it easier for government to regulate monopolistic industries
is used by firms to price discriminate through personalized pricing
suppose that an industry's long-run supply curve is downsloping. this suggests that - it is an increasing cost industry - relevant inputs have become more expensive - technology has become less efficient as a result of the industry expansion - it is a decreasing cost industry
it is a decreasing cost industry
in a duopoly, if one firm increases its price then the other firm can - keep its price constant and thus increase its market share -keep its price constant and thus decrease its market share - increase its price and thus increase its market share - decrease its price and thus decrease its market share
keep its price constant and thus increase its market share
the strategy of establishing a price that prevents the entry of firms is called - cartel pricing - limit pricing -price leadership -profit-maximizing price
leadership
which statement concerning monopolistic' competition is false - long-run equilibrium under monopolistic competition and pure competition both entail zero economic profit for firms - monopolistic competition likely to result in a greater variety of product brands than pure competition - the monopolistically competitive demand curve is more elastic than the demand curve facing a monopoly - long-run equilibrium in monopolistic competition does not entail any economic inefficiency bc of easy entry and exit
long-run equilibrium in monopolistic competition does not entail any economic inefficiency bc of easy entry and exit
which is true of pure competition but not of monopolist competition - there are no significant barriers to entry - long-run economic profits are zero - there are a large number of firms in the market - long-run equilibriums occur at the minimum point on the ATC curve
long-run equilibriums occur at the minimum point on the ATC curve
a monopolistically competitive industry combines elements of both competition and monopoly. the competition element results from - the likelihood of collusion - product differentiation - low entry barriers - mutual interdependence in decision making
low entry barriers
in the long run, a pure monopolist will maximize profit by producing that output at which marginal cost is equal to - average total cost - marginal revenue - average variable cost - average cost
marginal revenue
the product variety is likely to be greater in - monopolistic competition than in pure competition - pure competition than in monopolistic competition - homogeneous oligopoly than in monopolistic competition - homogeneous oligopoly than in differentiated oligopoly
monopolistic competition than in pure competition
network effect and simultaneous consumption tend to foster the development of - pure competition - monopoly power - net social benefit - allocative efficiency
monopoly power
the demand curve of a monopolistically competitive producer is - less elastic than that of either a pure monopolist or a pure competitor - less elastic than that of a pure monopolist, but more elastic than that of a pure competitor - more elastic than that of a pure monopolist, but less elastic than that of a pure competitor - more elastic than that of either a pure monopolist or a pure competitor
more elastic than that of a pure monopolist, but less elastic than that of a pure competitor
if marginal cost decreases and the MC curve shifts down a typical monopolist will - reduce price and reduce the quantity of output - reduce price and increase the quantity of output - increase the price and reduce the quantity of output - increase the price and increase the quantity of output
reduce price and increase the quantity of output
mutual interdependence means that each oligopoly firm - faces a perfectly elastic demand for its product - must consider the reactions of its rivals when it determines its price policy - produce a product identical to those of its rivals - produces a product similar but not identical to the products of its rivals
must consider the reactions of its rivals when it determines its price policy
a monopolistically competitive industry is like a purely competitive industry in that - each firm produces a standardized product -nonprice competition is a feature in both industries - neither industry has significant barriers to entry - firms in both industries face a horizontal demand curve
neither industry has significant barriers to entry
a monopolistically competitive industry is likely a purely competitive industry in that - each firm produces a standardized product - nonprice competition is a feature in both industries - neither industry has significant barriers to entry - firms in both industries face a horizontal demand curve
neither industry has significant barriers to entry
assume that the market for soybeans is purely competitive. currently, firms growing soybeans are earning positive economic profits. in the long run, we can expect - new firms to enter, causing the market price of soybeans to fall - new firms to enter , causing the market price of soybeans to rise - some firms to exit, causing the market price of soybeans to fall - some firms to exit, causing the market price of soybeans to rise
new firms to enter, causing the market price of soybeans to fall
if a purely competitive firm is producing at the MR=MC output level and earning an economic profit then - the selling price for this firm is above the market equilibrium price - new firms will enter this market - some existing firms in this market will leave - there must be price fixing by the industry's firms
new firms will enter this market
the supply curve for a monopoly is - the portion of the marginal cost curve that lies above the average variable cost curve - the portion of the marginal cost curve that lies above the average total cost curve - the portion of the marginal cost curve that lies above the average fixed cost curve - not clearly defined
not clearly defined
pure monopolists may obtain economic profits in the long run bc - of advertising - marginal revenue is constant as sales increase - of barriers to entry - of rising average fixed cost
of barriers to entry
two characteristics of oligopoly pricing that have frequently been observed are that - oligopolistic prices tend to be "sticky" or inflexible, and when the firms do change their price, they tend to do so together - oligopolistic firm's prices tend to fluctuate a lot, and these prices tend to move together with each other - oligopolists tend to practice a lot of price discrimination and there tend to be a wide variance in oligopoly pricing - oligopolistic firms' tend to fluctuate a lot, and there tends to be a wide variance in oligopoly pricing
oligopolistic prices tend to be "sticky" or inflexible, and when the firms do change their price, they tend to do so together
two characteristics of oligopoly pricing that have frequently been observed are that - oligopolistic prices tend to be "sticky" or inflexible, and when the firms do change their prices, they tend to do so together - oligopolistic firms' prices tend to fluctuate a lot, and these prices tend to move together w/ each other - oligopolists tend to practice a lot of price discrimination, and there tends to be a wide variance in oligopoly pricing - oligopolistic firms' price tend to fluctuate a lot, and there tends to be a wide variance in oligopoly pricing
oligopolistic prices tend to be "sticky" or inflexible, and when the firms do change their prices, they tend to do so together
when a purely competitive firm is in the long run equilibrium - marginal revenue exceeds marginal cost - price equals marginal cost - total revenue exceeds the total cost - minimum average total cost is less than the product price
price equals marginal cost
at the profit-maximizing level of output for a monopolist - price is greater than marginal cost - price is greater than the average revenue - average total cost equals marginal cost - total revenue is greater than the total cost
price is greater than marginal cost
for a monopolistically competitive firm in long-run equilibrium - price will equal marginal cost - price will equal the average total cost - marginal revenue will exceed marginal cost -price will equal the minimum average total cost
price will equal the average total cost
other things equal, a price discriminating monopolist will - realize a smaller economic profit than a nondiscriminating monopolist - produce a large output than a nondiscriminating monopolist - produce the same output as a nondiscriminating monopolist - produce a smaller output than a nondiscriminating monopolist
produce a large output than a nondiscriminating monopolist
other things equal, a price discriminating monopolist will - realize a smaller economic profit than a nondiscriminating monopolist - produce a larger output than a nondiscriminating monopolist - produce the same output as a nondiscriminating monopolist - produce a smaller output than a nondiscriminating monopolist
produce a larger output than a nondiscriminating monopolist
a firm is producing an output such that the benefit from one more unit is more than the cost of producing that additional unit. this means the firm is - producing more output than allocative efficiency requires - producing less output than allocative efficiency requires - achieving producing efficiency - producing an inefficient output, but we cannot say whether the output should increase or decrease
producing less output than allocative efficiency requires
excess capacity implies - productive inefficiency -allocative inefficiency - productive efficiency -allocative efficiency
productive inefficiency
in which of the following markets models do demand and marginal revenue not diverge - pure competition - monopolistic competition - pure monopoly - oligopoly
pure competition
in which one of the following markets models is x- inefficiency least likely to be present - pure competition - oligopoly - monopolistic competition - pure monopoly
pure competition
in which of this continuum of degrees of competition (highest to lowest) is monopolistic competition properly placed? - pure competition, oligopoly, pure monopoly, monopolistic competition - oligopoly, pure competition, monopolistic competition, pure monopoly - monopolistic competition, pure competition, pure monopoly, oligopoly - pure competition, monopolistic competition, oligopoly, pure monopoly
pure competition, monopolistic competition, oligopoly, pure monopoly
( last word) the economic profits generated by Elon Musk's series of innovations are most threatened by - rivals firms entering the market or copying musk innovation - government regulation -lack of demand for the goods and services they produce - the lack of cost efficiency in producing these goods and services
rivals firms entering the market or copying musk innovation
in a sequential game two firms, the first mover into a new market - is guaranteed positive economic profit - is assured of blocking any potential second mover from entering the - runs the risk that the untested new market not provide enough customer - will likely set a high price to reap greater profit unit the second mover enters
runs the risk that the untested new market not provide enough customer
Suppose a firm in a purely competitive market discovers that the price of its product is above its minimum AVC point but everywhere below ATC. given this, the firm - minimizes losses by producing at the mim. pt. of its AVC curve - maximizes profit by producing where MR=ATC - should close down immediately - should continue producing in the short run but leave the industry in the long run if the situation persists
should continue producing in the short run but leave the industry in the long run if the situation persists
(consider this) the main point of the 1987 wendy's commercial depicting a soviet fashion show was to - show Wendy's products differentiation from its competitors - grow its international customers base -emphasize the efficiency of its production model - highlight the dependability of its reliable and consistent standardized product
show Wendys products differentiation from its competitors
the marginal cost of a producer may be very small due to the product's ability to satisfy a large number of consumers at the same time. this characteristic of the product is called - economies of scale - rent-seeking - simultaneous consumption - consumer sovereignty
simultaneous consumption
a single- price monopoly is economically inefficient bc, at the profit-maximizing output - marginal revenue exceeds product price at all profitable levels of production - monopolists always price their products on basis of the ability of consumers to pay rather than on costs of production - MC> P - society values additional units of the monopolized product more highly than it does the alternative product those resources could otherwise produce
society values additional units of the monopolized product more highly than it does the alternative product those resources could otherwise produce
use your basic knowledge and your understanding of market structures to answer this question. which of the following companies most closely approximates a monopolistic competitor - subway sandwiches - Pittsburgh plate glass - ford motor company -microsoft
subway sandwiches
the four firm sales concentration ratio for an industry measures the - geographic concentration of firms - the extent to which the four largest firms dominate the production of a good - the percentage of the industry's capital facilities owned by the four largest firms - degrees of X- inefficiency in the industry
the extent to which the four largest firms dominate the production of a good
which of the following best approximates a pure monopoly - a gas station in a large city - the Kansas city wheat market t -the only grocery store in a small isolated town - the soft drink market
the only grocery store in a small isolated town
the term allocative efficiency refers to - the level of output that coincides with the intersection of the MC and AVC curve - minimization of the AFC in the production of any good - the production of the product mix most desired by consumers - the production of the good at the lowest average total cost
the production of the product mix most desired by consumer
if oligopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry will be most accurately predicted by which of the following models - the kinked demand curve model of oligopoly - the price leadership model of oligopoly - the pure monopoly model - the monopolistic competition model
the pure monopoly model
if oligopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry will be most accurately predicted by which of the following models? - the kinked demand curve model of oligopoly - the price leadership model of oligopoly - the pure monopoly model - the monopolistic competition model
the pure monopoly model
the kinked demand curve model helps to explain price rigidity bc - there is a gap in the marginal revenue curve within which changes in marginal cost will not affect output or price - demand is inelastic above an elastic below the going price - the model assumes firms are engaging in the same form of collusion - the associated marginal revenue curve is perfectly elastic at the going price
there is a gap in the marginal revenue curve within which changes in marginal cost will not affect output or price
what do economies of scale, the ownership of essential raw materials, and patents have in common - they must all be present before price discrimination can be practiced - they are all barriers to entry - they all help explain why a monopolist's demand and marginal revenue curve coincide - they all help explain why the long-run average cost curve is U- shaped
they are all barriers to entry
what do economies of scale, the ownership of essential raw materials, and patents have in common - they must all be present before price discrimination can be practiced - they are all barriers to entry - they all help explain why a monopolist's demand and marginal revenue curves coincide - they all help explain why the long-run average cost curve is U- shaped
they are all barriers to entry
which of the following is true of normal profit - they are necessary to keep a firm in the industry in the long run - they are zero under pure competition in the long run - they are excluded from a firm's costs of production - they are what attract other firms to enter an industry
they are necessary to keep a firm in the industry in the long run
suppose a pure monopolist is charging a price of $12 and the associated marginal revenue is $9. we thus know that - demand is inelastic at this price - the firm is maximizing profit - total revenue is increasing - total revenue is at a max.
total revenue is increasing
suppose a pure monopolist is charging a price of $12 and the associated marginal revenue is $9. we thus know that - demand is inelastic at this price - the firm is maximizing profit - total revenue is increasing - total revenue is at a maximum
total revenue is increasing
suppose a pure monopolist is charging a price of 12 and the associated marginal revenue is 9. we thus know that - demand is inelastic at this price - the firm is maximizing profit - total revenue is increasing - total revenue is at a maximum
total revenue is increasing
in monopolistically competitive markets, resources are - overallocated bc long-run equilibrium occurs where price exceeds marginal cost - under-allocated bc long-run equilibrium occurs where price exceeds marginal cost - overallocated bc long-run equilibrium occurs where marginal cost exceeds price - under-allocated bc long-run equilibrium occurs where marginal cost exceeds price
under-allocated bc long-run equilibrium occurs where price exceeds marginal cost
a positive sum game occurs - when the sum of two firms outcome is positive - whenever any of the values in the payoff matrix are positive - when the gains received by one player are exactly offset by the loss es to the other - whenever the payoffs to the two players are equal
when the sum of two firms outcome is positive
the representative firm in a purely competitive industry - will always earn a profit in the short run - may earn either an economic profit or a loss in the long run - will always earn an economic profit in the long run - will earn zero economic profit in the long run
will earn zero economic profit in the long run
a two-player or firm game in which one firm's gain must equal the other firm's loss is called - positive-sum game - zero-sum game - negative sum game - one-time game
zero-sum game
