ECO111-MEOW-PART-4
b. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium.
A competitive market is in long-run equilibrium. If demand increases, we can be certain that price will a. rise in the short run. Some firms will enter the industry. Price will then rise to reach the new long-run equilibrium. b. rise in the short run. Some firms will enter the industry. Price will then fall to reach the new long-run equilibrium. c. fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. d. not rise in the short run because firms will enter to maintain the price.
c. generally fails to maximize total economic well-being.
A monopoly market a. always maximizes total economic well-being. b. always minimizes consumer surplus. c. generally fails to maximize total economic well-being. d. generally fails to maximize producer surplus.
d. All of (i), (ii), and (iii) are correct.
A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it a. (i) can prevent children from buying the lower-priced tickets and selling them to adults. b. (ii) has some degree of monopoly pricing power. c. (iii) can easily distinguish between the two groups of customers. d. All of (i), (ii), and (iii) are correct.
a. maximize profit and produce a socially-optimal level of output.
A perfectly price-discriminating monopolist is able to a. maximize profit and produce a socially-optimal level of output. b. maximize profit, but not produce a socially-optimal level of output. c. produce a socially-optimal level of output, but not maximize profit. d. exercise illegal preferences regarding the race and/or gender of its employees.
d. All of (i), (ii), and (iii) are correct.
A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following? a. (i) average revenue exceeds marginal revenue b. (ii) marginal revenue equals marginal cost c. (iii) price exceeds marginal cost d. All of (i), (ii), and (iii) are correct.
a. average revenue exceeds marginal revenue
A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following? a. average revenue exceeds marginal revenue b. marginal revenue exceeds average revenue c. average revenue is equal to marginal revenue d. revenue is always maximized along with profit
d. Not enough information is given to determine the answer.
A profit-maximizing monopolist charges a price of $14. The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7. What is the monopolist's profit? a. $90 b. $105 c. $180 d. Not enough information is given to determine the answer.
c. (iii) often fails to convey substantive information.
Critics of advertising argue that advertising a. (i) creates desires that otherwise might not exist. b. (ii) hinders competition. c. (iii) often fails to convey substantive information. d. All of (i), (ii), and (iii) are correct.
b. negative.
For a monopolist, when the price effect is greater than the output effect, marginal revenue is a. positive. b. negative. c. zero. d. maximized.
a. P > MR = MC.
For a profit-maximizing monopolist, a. P > MR = MC. b. P = MR = MC. c. P > MR > MC. d. MR < MC < P.
a. be able to increase its markup over marginal cost.
If a firm in a monopolistically competitive market successfully uses advertising to decrease the elasticity of demand for its product, the firm will a. be able to increase its markup over marginal cost. b. eventually have to lower price to remain competitive. c. increase the welfare of society. d. reduce its average total cost.
a. have a negligible impact on the market price.
In a competitive market, the actions of any single buyer or seller will a. have a negligible impact on the market price. b. have little effect on market equilibrium quantity but will affect market equilibrium price. c. affect marginal revenue and average revenue but not price. d. adversely affect the profitability of more than one firm in the market.
b. market structure.
Monopolistic competition is a type of a. oligopoly. b. market structure. c. price discrimination. d. advertising strategy.
d. (ii), (iii), and (iv) only
Monopolistic competition is characterized by (i) efficient scale (ii) markup pricing over marginal cost (iii) deadweight loss (iv) excess capacity a. (i) and (ii) only b. (ii) and (iv) only c. (i), (ii), and (iii) only d. (ii), (iii), and (iv) only
d. (i), (ii), and (iii)
Monopolistic competition is characterized by which of the following attributes? (i) free entry (ii) product differentiation (iii) many sellers a. (i) and (iii) only b. (i) and (ii) only c. (ii) and (iii) only d. (i), (ii), and (iii)
b. (ii) government-created monopolies.
Patent and copyright laws are major sources of a. (i) natural monopolies. b. (ii) government-created monopolies. c. (iii) resource monopolies. d. None of (i), (ii), and (iii) is correct.
b. a downward-sloping line that lies below the demand curve
QN=413 (17556) revenue curve? a. a downward-sloping line that is identical to the demand curve b. a downward-sloping line that lies below the demand curve c. a horizontal line that is identical to the demand curve d. a horizontal line that lies below the demand curve
b. (ii) natural monopoly
Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure? a. (i) ownership of a key resource by a single firm b. (ii) natural monopoly c. (iii) government-created monopoly d. None of (i), (ii), and (iii) is correct.
b. 4 units
Refer to Table 15-5. If the monopolist faces a constant marginal cost of $2, how much output should the firm produce? a. 3 units b. 4 units c. 5 units d. 6 units
d. Firms are likely to leave the market since firms are earning a negative economic profit.
Refer to Table 16-3. Which of the following is likely to happen in the long run in this market? a. The market is currently in a long-run equilibrium. b. The market price is likely to fall. c. Firms are likely to enter the market since firms are earning a positive economic profit. d. Firms are likely to leave the market since firms are earning a negative economic profit.
c. average total cost curve is downward sloping.
When a firm has a natural monopoly, the firm's a. marginal cost always exceeds its average total cost. b. total cost curve is horizontal. c. average total cost curve is downward sloping. d. marginal cost curve must lie above the firm's average total cost curve.
b. price exceeds or equals marginal cost.
When a profit-maximizing firm in a monopolistically competitive market is in long-run equilibrium, a. the demand curve will be perfectly elastic. b. price exceeds or equals marginal cost. c. marginal cost must be falling. d. marginal revenue exceeds marginal cost.
a. a brand name
When quality cannot be easily judged in advance, what provides consumers with information about the quality of a product? a. a brand name b. a tie-in c. the quantity available for sale d. the amount of deadweight loss
c. P > MC and demand = ATC
Which of the following conditions is characteristic of a monopolistically competitive firm in long-run equilibrium? a. P > demand and P = MR b. ATC > demand and MR = MC c. P > MC and demand = ATC d. P < ATC and demand > MR
c. Free entry is limited.
Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Free entry is limited. d. Each firm chooses an output level that maximizes profits.
b. competition and monopol
Which of the following pairs illustrates the two extreme examples of market structures? a. competition and oligopoly b. competition and monopol c. monopoly and monopolistic competition d. oligopoly and monopolistic competition
