Econ final
Refer to the graphs below what do you expect to happen in this perfectly competitive market as it approaches long-term equilibrium
The price will decrease until it is equal to the minimum of average total cost and profits will become zero
Which of the following measures is conceptually the same as price
average revenue
Refer to the graph below which of the curves in the grasary for determining the level of output that maximize profit for a perfectly competitive firm
The ATC curve
Refer to the graph of cost for a perfectly competitive firm below which of the following best represents profit per unit The shaded rectangle The distance between point a and B The market price None of the above
The distance between point a and B
If increased competition leads to higher cost and higher prices in the industry how should that market be characterized
As a natural monopoly
REI and level nine sports are competing over the price of gloves what is the dominant strategy
Both firms will charge $50
Which of the following types of firms use the marginal revenue equals marginal cost approach to maximize profits
Both perfectly competitive and monopolistically competitive firms
Using the broader definition of monopoly, in which of the following cases could we argue that Microsoft has a monopoly in computer operating systems?
If Macintosh and Linux were not considered close substitutes for windows
Refer to the graph below the loss in revenue from decreasing price is greater than the gain in revenue from increasing price whenever
Marginal revenue is negative
Referred to the graph below based on the information on the graph what is true about marginal revenue
Marginal revenue remains constant as the quantity of bushels sold increases
What is the definition of market
Market power is the same as inefficiency as measured by the amount of deadweight loss from a monopoly
For what type of market structures demand curve the same as marginal revenue
Perfect competition
To maximize profit which of the following should a firm attempt to do
find the largest difference between total revenue and total cost
The more cell phones and use the more valuable they become to consumers this is an example of
network externalities
If automobile companies have significant bargaining power when buying tires, you would expect that
tire prices will be low.
What is the dominant strategy of eBay auction participants
to place a bid equal to the maximum value you place on the item
Every game has these characteristics:
rules, strategies, and payoffs
A patent typically gets a hold are exclusive right to the product for a period of
20 years
Refer to the table below based on the numbers in the table how much of this farmer produce in order to maximize profit
6 bushels
Which of the following is the definition of business strategy
A business strategy refers to actions taken by firms to attain their objectives
A group of firms that concludes by agreeing to restrict output to increase prices and profit is called
A cartel
A strategy that is the best for a firm no matter what strategies others firms use is
A dominant strategy
A buyer or seller that is unable to affect the market price is called
A price taker
Refer to the graphs below the perfectly competitive firm represented in this graph on the right is experiencing
A profit in the short run
Refer to the graphs below what do you expect to happen in this market as it approaches long run equilibrium
A shift to the right of the market supply curve as new firms enter
Which of the following are characteristics of a perfectly competitive industry Firms are unable to control the prices of the products they sell Firms are unable to earn an economic profit in the long run Firm sell identical products All of the above
All of the above
Which of the following are effects of monopoly Monopoly cause a reduction in consumer surplus Monopoly causes an increase in producer surplus Monopoly cause a reduction in economic efficiency All of the above
All of the above
Which of the following is a barrier to entry Economies of scale Ownership of a key input Patents all of the above
All of the above
Which of the following types of firms use the marginal revenue equals marginal cost approach to maximize profit Perfectly competitive firm Monopolistic competitive Monopoly All of the above
All of the above
Which firms face a downward sloping demand curve in a downward sloping marginal revenue for
All price makers
For the graph below which of the curse is not necessary for determining the level of profit earned by a perfectly competitive firm
All three curves are needed to determine the level of profit earned by a perfectly competitive firm
Suppose you invest $200,000 in a business the return you could earn each year on a similar investment using that money is 10% or 20,000 in an economic sense the 20,000 is
An economic cost
Dominoes in Little Caesars Arkham feeding over the price of pizza what is the dominant strategy
Both firms charge five dollars
Why does monopolistically competitive firm have a downward sloping demand curve
Because changing the price will affect the quantity sold
Economic loss refers to the situation in which a firms total revenue is less than its total cost. To calculate the amount of a loss which of the following costs would be included
Both explicit cost and implicit cost
Assume that an industry that began as a perfectly competitive industry becomes a monopoly which of the following describes a change in the market as a result of big compared to when the industry was perfectly competitive the monopolist will
Charge a higher price and produce less outlet
An agreement among firms to charge the same price or to otherwise not compete is
Collusion
Economies of cell help determine the extent of
Competition in an industry
What trade-offs do consumers face when buying a product from a monopolistic competitive firm
Consumers pay aPrice greater than marginal cost but also have choices more suitable to their taste
How does the entry of new coffee houses affect the profits of existing coffee houses
Entry will decrease the profits of existing coffee houses by shifting each of their individual demand curves to the left and making the demand curves more elastic
Which of the following rights is given to the holder of a patent
Exclusive right to a new product
Fill in the blanks with the word and phrase that best The history of OPEC sustaining high prices has been _________ because members often __________ their output quotas
Difficult produce more than
Which type of barrier to entry is the granting of a parent copyright to this individual or a firm considered
Entry blocked by government action
Refer to the graph below the graph on the left pics demand and supply in the competitive market for a wheat the graph on the right to fix the demand curve facing farmer waffle an individual producer in the market for wheat the demand curve for from her waffles wheat is horizontal in the market price of four dollars because
Farmer waffle is a price taker
Fill in the blanks suppliers have more bargaining power when ___________ firms can supply the input and the input _________ specialized
Few is
Which of the following are characteristics of monopolistic competition
Firm sets similar but not identical products
How do you find the profit maximizing quantity for a firm under monopoly
For all firm types it is the same process. Go to the point where MR = MC. Then find the quantity on the x-axis below MR = MC.
How do you find the profit maximizing quantity for a perfectly competitive firm
For all firm types, it is the same process. Go to the point where MR = MC. Then find the quantity on the x-axis below MR=MC.
If individual countries that are members of OPEC exceed their production quarters the amount of oil supplied to the world ______ and the price of oil _____
Increases decreases
When a firms demand curve slopes downward and the firm decides to cut price which of the following happens
It sells more units but receives lower revenue per unit.
Economies of scale exist when a firms __________ average cost fall as it __________ output
Long run increases
Which of the following statements regarding natural monopoly is true
Nacho monopoly is most likely to occur in markets were fixed costs are very large relative to variable costs
Match the following definition with one of the terms below a situation where each firm chooses the best strategy given the strategies chosen by other firms
Nash equilibrium
What is the name given to the situation where economies of cells are so large that one firm can supply the entire market at a lower average total cost them more than two firms
Natural monopoly
Which type of efficiency is achieved by a monopolistic competitive firm in the long run
Neither allocated nor productive efficiency
Is zero economic profit in evitable in the long run for a monopolistic competitive firm
No a firm could try to continue making a profit in the long run by reducing production costs and improving it products
If an individual firm in a perfectly competitive market increases it's price the formal experience Higher revenue Lower average total cost Increase sales None of the above
None of the above
Which of the terms below is defined as a market structure in which a small number of inter-dependent firms compete
Oligopoly
What is the relationship between price average revenue and marginal revenue for a firm and a perfectly competitive market
Price is equal to both average revenue and marginal revenue
Which of the following terms best describes how the result of the forces of competition drives the market price to the minimum average cost of the typical firm Allocated efficiency Productive efficiency Decreasing cost industry Competitive mark down
Production efficiency
Refer to the graph below of the demand curve facing a firm in the perfectly competitive market for wheat the fact that the demand curve is horizontal in place which of the following
The firm can sell any amount of output as long as it excepts market price of four dollars
Refer to the graph below if a perfectly competitive firm is producing at point a which of the following is true
The firm earn zero economic profit
If marginal revenue stops downward which of the following is true
The firm must decrease its price to sell a larger quantity
If a firm has the ability to affect the price of the good or service at sells what is the relationship between it's marginal revenue curve and it's demand curve
The firm will have a marginal revenue curve that is below its demand curve
If market demand shifts to the right how will a competitive firms level of output change
The firm will increase its output and its profits will increase
In the broader sense game theory studies the decisions of firms in industries where the profits of each firm depend on
The firms interaction with other firms
If firms in a perfectly competitive industry are earning positive profits what would you expect to see in the long run
The market supply curve will shift to the right as firms into the market prices will fall and profits will fall
When I monopolistic competitive firm decrease his price good and bad things happen which of the following is considered a good thing for the firm
The output effect
When are monopolistically competitive firm decrease his price good and bad things happen which of the following is considered a bad thing for the firm
The price effect
Long run competitive equilibrium is
The situation which the entry and exit of firms has resulted in the typical firm just breaking even
Which of the following conditions must exist in order to have a perfectly competitive market There must be many buyers and many sellers all of whom are small relative to the market The products sold by firms in the market must be different from each There must be some barriers to entry in order to protect perfect competition All of the above
There must be many buyers and sellers all of whom are small relative to the market
Which of the following situations can a firm be considered a monopoly
When a firm can ignore the actions of all other firms
What level of output should be produced in order to maximize profit
Where marginal revenue and marginal cost equal each other
What are laws aimed at promoting competition among firms called
antitrust laws
Which of the terms below is defined as anything that keeps new firms from entering an industry in which firms are earning economic profits
barriers to entry
What is a merger between firms in the same industry called
horizontal merger
Which of the following is most likely to increase Market Power
horizontal mergers
Which of the following terms best describes the additional revenue associated with selling an additional unit of output
marginal revenue
Which of the following market structures is the firms demand curve the same as the market demand for the product
monopoly
Which term best describes the minimum amount that a firm needs to earn on a $100,000 investment to be willing to remain in a perfectly competitive industry in the long run
opportunity cost
What is marginal cost
the cost of producing one more unit of a good