Econ 102

If the market price is $8, how many units of output should the firm produce to maximize profit?

6 units

Refer to Table 16-1. What is the concentration ratio in Industry B?

61%

In a typical cartel agreement, the cartel maximizes when it?

Behaves as a monopolist

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly...

Quantity is lower than the socially optimal quantity

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Quantity is lower than the socially optimal quantity.

When firms have an incentive to exit a competitive market, their exit will?

Raise the profits of the firms that remain in the market.

If there is an increase in market demand in a perfectly competitive market, then in the short run prices will?

Rise

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $43.60 per unit. The marginal revenue of output is?

-$376.40

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

-$75.40.

Monopolistic competition is inefficient market structure because?

-Price exceeds marginal cost -It has a deadweight loss, just as monopoly does at the equilibrium -Some consumers will value the good at more than the marginal cost of production ALL OF THE ABOVE ARE CORRECT

The free and exit of firms in a monopolistically competitive market guarantees that

Both economic profit and economic losses disappear in the long run.

In a competitive market, no single producer can influence the market price because?

Many other sellers are offering a product that is essentially identical.

At the profit-maximizing level of output,

Marginal revenue equals marginal cost.

Refer to Table 14-1. Over what range of output is marginal revenue declining?

Marginal revenue is constant over the entire range of output.

If the monopolist produces 5 units, what is it average revenue?

$18

Given that Bearclaws chooses the profit maximizing price and quantity, what profit level will it obtain?

$280

Refer to Figure 15-4. The marginal revenue curve for a monopoly firm is depicted by curve

$280

If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to?

$0

Refer to Figure 15-18. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to.

$0

Refer to Table 14-5. For this firm, the marginal revenue of the 12th unit is?

$11

If this market for water were perfectly competitive instead of monopolistic, what would be the price for water?

$2

In order to maximize profits, the monopolist should charge a price of?

$20

Refer to Scenario 15-6. How much additional profit can the concert promoters earn by charging each customer their willingness to pay relative to charging a flat price of $150 per ticket?

$25,000

Suppose that Abby and Brad work together to operate as a profit-maximizing monopolist. What price will they charge for water?

$6

Suppose that a firm operating in perfectly competitive market sells 100 units of output. Its total revenue from the sales are $500. Which of the following statements is correct?

- (i) Marginal revnue equals $5 -(ii) Average revenue equals $5 (iii) Proce equals $5 (i), (ii), (iii)

If two firms comprise the entire soft drink market, the market would be a(n)?

Duopoly

Refer to Figure 14-1. If the market price is $4.00, the firm will earn?

Negative economic and shut down.

Which of the following is NOT a characteristic of a monopoly?

One buyer

Price discrimination requires the firm to?

Separate customers according to their willingness to pay.

Farmer McDonald sells wheat to a broker in Kansas City, Missouri. Because the market for wheat is considered to be competitive, Mr. McDonald maximizes his profit by choosing?

The quantity at which market price is equal to Mr. McDonald's marginal cost of production.

In the long run, each firm in a competitive industry earns?

Zero economic profits.

Refer to Table 14-5. For this firm, the price of the product is?

$11

If the average total cost is $30 at the profit-maximizing quantity, then the maximum profit is?

$144

In order to maximize profit, the firm will charge a price of?

$36

Refer to Figure 16-2. In order to maximize profit, the firm will charge a price of

$36

Suppose a monopolist charges a price of $27 for its product and sells 10 units at that price. At 10 units of production, the firm has an average fixed cost equal to $10 and an average variable cost equal to $13. How much total profit is the firm earning at this price?

$40

Suppose a monopolist charges a price of $27 for its product and sells 10 units at that price. At 10 units of production the firm has average fixed cost equal to $10 and average variable cost equal to $12. How much total profit is the firm earning at this price?

$50

Refer to Figure 15-9. The deadweight loss caused by a profit-maximizing monopoly amounts to.

$500

The deadweight loss caused by a profit-maximizing monopoly amounts to?

$500

Refer to Table 14-10. This firm should continue to produce and sell units as long as the marginal cost of production is less than or equal to?

$7

Refer to Table 15-11. What price should the firm charge to maximize its profit?

$7

What price should the firm charge to maximize profit?

$7

Refer to Table 14-9. In order to maximize profit, the firm will produce a level of output where marginal revenue is equal to?

$8

Refer to Table 14-6. What is the total revenue from selling 7 units?

$840

Based upon the information shown, what is the total revenue for Bearclaws, given that it maximizes profits?

$980

Refer to Figure 15-22. Based upon the information shown, what is total revenue for Bearclaws, given that it maximizes profits?

$980

In response to the situation, represented by the figure, we would expect?

-The demand for this firm's product to increase, assuming this firm does not exist -This firms profit to move from its current value toward zero -Some of the firms that are currently in the market to exit ALL OF THE ABOVE ARE CORRECT

Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6. Its average total is $4. Its profit is?

1,600

In order to maximize profits, the monopolist should produce?

12 units

Refer to Figure 16-2. The firm's profit-maximizing level of output is.

24 units

The firm's profit-maximizing level of output is?

24 units

Refer to Figure 15-4. The marginal revenue curve for a monopoly firm is depicted by curve.

A

The marginal revenue curve for a monopoly firm is depicted by curve?

A

A situation in which firms choose their best strategy given the strategies by the other firms in the market is called?

A Nash Equilibrium

Which of the following would be most likely to have monopoly power?

A municipal water company

Which of the following would be most likely to have monopoly powers?

A municipal water company

As the figure is drawn, the firm is in

A short-term equilibrium but it is not in a long run equilibrium.

Refer to Figure 14-8. Which line segment best reflects the short run supply curve for this firm?

ABCF

How much additional profit can the concert promoters earn by charging customer their willingness to pay relative to charging a flat rate of $150 per ticket?

ACG

Refer to Figure 14-1. The firm will earn a positive economic profit in the short run if the market price is?

Above $6.30

In a monopolistically competitive industry, firms set price.

Above marginal cost since each firm is a price setter.

What is the concentration ratio in Industry B?

Approximately 56%

A monopolist will choose to increase output when

At the present level of output, marginal revenue exceeds marginal cost.

A monopolist will choose to increase output when?

At the present level of output, marginal revenue exceeds marginal cost.

Whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue?

Does not change

Monopolistic competition differs from perfect competition because in monopolistically competitive markets?

Each of the sellers offer a somewhat different product.

Monopolistic competition differs from perfect competition because in monopolistically competitive markets.

Each of the sellers offers a somewhat different product.

The defining characteristic of a natural monopoly is

Economies of scale over the relevant range of output.

The defining characteristic of natural monopoly is?

Economies of scale over the relevant range of output.

A benevolent social planner would have the monopoly operate at an output level...

Equal to Q0

Refer to Figure 15-14. A benevolent social planner would have the monopoly operate at an output level

Equal to Q0.

Suppose a profit-maximizing firm in a competitive market produces rubber bands fall below the minimum of its average total cost, but still lies above the minimum of average variable cost, in the short run the firm will?

Experience losses will continue to produce rubber bands.

In a monopolistically competitive market,

Firms can enter or exit the market without restrictions.

In a monopolistically competitive market?

Firms can enter or exit the market without restrictions.

Refer to Figure 14-14. When the market is in long run equilibrium at point W in panel (b), the firm represented in panel (a) will?

Have a zero economic profit.

As a number of firms in an oligopoly market?

Increases, the market approaches the competitive market outcome.

Based on the concentration ratio, which industry is the most competitive?

Industry B

Refer to Table 16-3. Based on the concentration ratio, which industry is the most competitive?

Industry C

Which of the following is an example of a barrier to entry?

Larry obtains a copyright for the new computer game that he invented.

Suppose a firm has a monopoly on the scale of a computer game and faces a downward-sloping demand curve. When selling the 36th game, the firm will always receive?

Less marginal revenue on the 36th game than it received on the 35th game.

Suppose a firm has a monopoly on the sale of a computer game and faces a downward-sloping demand curve. When selling the 50th game, the firm will always receive

Less marginal revenue on the 50th game than it received on the 49th game.

The equilibrium price in a market characterized by oligopoly is?

Lower than in monopoly markets and higher than in perfectly competitive markets.

If the monopoly operates at an output level less than Q0, then an increase in output toward (but not exceeding) Q0 would?

Lower the price and raise total surplus

Refer to Figure 15-14. If the monopoly operates at an output level less than Q0, then an increase in output toward (but not exceeding) Q0 would

Lower the price and raise total surplus.

The higher the concentration ratio, the

More control an individual firm has to set prices

Refer to Figure 14-5. Firms would be encouraged to enter this market for all prices that exceed?

P4

Refer to Figure 15-3. Which of the following statements is correct?

Panel B represents the typical demand curve for a perfectly competitive firm, and Panel A represents the typical demand curve for a monopoly.

Which of the following statements is correct?

Panel B represents the typical demand curve for a perfectly competitive firm, and Panel A represents the typical demand curve for a monopoly.

Which of the panels depicts a firm in a monopolistically competitive market earning positive economic profits?

Panel C

Which of the following market structures would the highest output of a particular good be produced?

Perfect Competition

Financial aid to college students, quantity discounts, and senior citizen discounts are all discounts are examples of?

Price discrimination

Financial aid to college students, quantity discounts, and senior citizen discounts are all examples of.

Price discrimination.

The dominant strategy for Acme is to?

Produce a good quality product and the dominant strategy for Pinnacle is to produce a good quality product.

The prisoners' dilemma game?

Provides insight into why cooperation is difficult.

Price discrimination requires the firm to.

Separate customers according to their willingness's to pay.

When fixed costs are ignored because they are irrelevant to a business's production decision, they are called?

Sunk Costs

In the long run, a profit-maximizing firm will choose to exit a market when?

Total revenue is less than cost.

Refer to Table 16-3. What is the concentration ratio for Industry D?

approximately 60%

The higher the concentration ratio, the.

more control an individual firm has to set prices and less competitive the industry