AP Econ CQA 3

refer to the short-run data. total fixed cost for this firm is

$200

refer to the above data. if there were 1,000 identical firms in this industry and total or market demand is as shown below, equilibrium price will be

$32

refer to the graph showing the short-run revenue curves for a monopolist. the elastic portion of the demand curve ranges from

0 to q3

refer to the above diagram. at the profit-maximizing output, total revenue will be

0AHE

Refer to the above short-run data. The profit-maximizing output for this firm is:

320 units

One feature of pure monopoly is that the monopolist is:

a price maker

a purely competitive seller is

a price taker

Refer to the above short-run data. Which of the following is correct?

any level of output between 100 and 440 units will yield an economic profit

refer to the above diagram for a purely competitive producer. the firm will produce at a loss at all prices

between p2 and p3

Suppose that at 500 units of output marginal revenue is equal to marginal cost. The firm is selling its output at $5 per unit and average total cost at 500 units of output is $6. On the basis of this information, we:

cannot determine whether the firm should produce or shut down in the short run

a pure monopoly firm will never charge a price in the inelastic range of its demand curve because lowering price to get into this region will

decrease total revenue, increase total cost, and decrease profit

marginal revenue is positive whenever

demand is price-elastic

The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.

downsloping; perfectly elastic

refer to the above short-run data. the shape of the total cost curve reflects

economies and diseconomies of scale

a monopoly is most likely to emerge and be sustained when

economies of scale are large relative to market demand

Under pure monopoly, a profit-maximizing firm will produce:

in the elastic range of its demand curve

if a purely competitive firm is producing at some level less than the profit-maximizing output, then

marginal revenue exceeds marginal cost

Assume for a competitive firm that MC = AVC at $12, MC = ATC at $20, and MC = MR at $16. This firm will:

maximize its losses by producing in the short run

given a downsloping linear demand curve, when total revenue is decreasing, marginal revenue is

negative and demand is inelastic

refer to the above diagram. this firm will earn only a normal profit if product price is

p2

refer to the graph above showing the short-run revenue curves for a monopolist. demand is unit elastic at what price

p2

refer to the graph above showing the short-run revenue curves for a monopolist. what price should be charged in order to maximize total revenue

p2

which is a barrier to entry

patents

the demand schedule or curve confronted by the individual purely competitive firm is

perfectly elastic

at which combination of price and marginal revenue would the price elasticity of demand be inelastic

price equals, $40, marginal revenue equals -$5

in the short run a purely competitive seller will shut down if

price is less than average variable cost of all outputs

refer to the above data. if the market price for the firm's product is $28, the competitive firm will

produce 7 units at a loss of $14

a firm finds that at its MR=MC output, its TC=$1,000, TVC=$800, TFC=$200, and total revenue is $900. this firm should

produce because the resulting loss is less than its TFC

refer to the graph above showing the short-run revenue curves for a monopolist. at what output level is demand inelastic

q4

the demand curve confronting a nondiscriminating pure monopolist is

the same as the industry's demand curve

in a purely competitive industry

there may be economic profits in the short run, but not in the long run

In the short run a purely competitive firm that seeks to maximize profit will produce:

where the total revenue exceeds total cost by the maximum amount

if a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue

will also be $5

at which combination of price and marginal revenue (P,MR) is the price elasticity of demand greater than 1

P=15 MR=8

which is most characteristic of a pure monopoly

The firm produces a good or a service for which there are no close substitutes.