Econ Exam III
Which of the following statements is not correct
Both monopolistic competition and perfect competition are characterized by product differentiation.
15-4 what price will the monopolist charge in order to maximize profit
K
16-8 Assume a monopolistically competitive frim is currently producing the profit-maximizing level of output. Which of the following represents the excess capacity of the firm
LM
Which of the following expressions is correct for a competitive firm
Profit= (quantity of output) x (price- average total cost)
15-3 a profit maximizing monopoly will produce an output level of
Q3
16-8 which of the following best describes the profit-maximizing outcome for the firm depicted here
This firm is in long run equilibrium and will continue to earn zero profit
The commercial jetliner industry consisting of Boeing and Airbus would best be described as
an oligarchy
13-2 Curve A represents which type of cost curve
average fixed cost
When marginal cost is less than average total cost,
average total cost is falling
The fundamental source of monopoly power is
barriers to entry
Which of the following industries is most likely to exhibit this characteristics of free entry
dairy farming
Monopoly firms face
downward-sloping demand curves, so they can sell only the specific price-quantity combinations that lie on the demand curve
A benefit to society of the patent and copyright laws is that those laws
encourage creative activity
If a firm in a perfectly competitive market triples the number of units of output sold, then total revenue will
exactly triple
16-1 which of the following graphs illustrates the demand curve most likely faced by a firm in a monopolistically competitive market
graph (b)
16-4 which of the following graphs depicts a short-run equilibrium that will encourage the entry of other firms into a monopolistically competitive industry
graph (c)
Which of the following statements is correct?
if duopolists successfully collude, then their combined output will be observed if the market were a monopoly
An example of an explicit cost of production would be the
lease payments for the land on which a firm's factory stands
14-1 suppose that a firm in a competitive market has the following cost curves. the firm should shut down if the market price is
less than $6
If a profit-maximizing monopolist faces a downward-sloping market demand curve, its
marginal revenue is less than the price of the product
total cost is the
market value of the inputs a firm uses in production
In the short run, a firm in a monopolistically competitive market operates much like a
monopolist
if the distribution of water is a natural monopoly, then
multiple firms would likely each have to pay large fixed costs to develop their own network of pipes
15-1 the shape of the average cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the monopoly types best coincides with the figure
natural monopoly
When profit-maximizing firms in competitive markets are earning profits,
new firms will enter the market
In the long run equilibrium,
only a perfectly competitive firm operates at its efficient scale
Total revenue equals
price x quantity
A key characteristic of a competitive market is that
producers sell nearly identical products
The deadweight loss associated with a monopoly occurs because the monopolist
produces an output level less than the socially optimal level
The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
profit is maximized
The Sherman Antitrust Act
restricted the ability of competitors to engage in cooperative agreements
The most likely explanation for economics of scale is
specialization of labor
For a large firm that produces and sells automobiles, which of the following costs would be a variable cost?
the cost of the steel that is used in producing automobiles
The short-run supply curve for a firm in a perfectly competitive market is
the portion of its marginal cost curve that lies above its average variable cost
As the number of firms in an oligarchy increases,
the total quantity of output produced by firms in the market gets closer to the socially efficient quantity
14-2 suppose a firm operating in a competitive market has the following cost curves. if the market price is $10, what is the firm's short-run economic profit
$15
14-2 suppose a firm operating in a competitive market has the following cost curves. If the market price is $10, what is the firm's total revenue
$50
Cindy's Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes). The firm's total cost is
$500
13-2 at which number of workers does diminishing marginal product begin?
2
table 14-6 suppose that a firm in a competitive market faces the following revenues and costs. The firm should not produce an out level beyond
5 units
