Exam 3 Econ

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(Figure 24.1) The profit-maximizing monopolist will charge a price of

A

Which of the following is characteristic of a perfectly competitive market?

A large number of firms

(Figure 23.5) A perfectly competitive firm will maximize profits by producing the level of output that corresponds to point

B

(Figure 24.1) The profit-maximizing rate of output is

F

Which of the following is true about a competitive market supply curve?

It is the sum of the marginal cost curves of all the firms

Which of the following rules is satisfied when a monopoly maximizes profits

MR=MC

Monopolists are price

Makers, but competitive firms are price takers.

A firm should shut down production when:

P < minimum AVC

For a perfectly competitive market, long-run equilibrium is characterized by all of the following but which one?

P=maximum ATC

Which of the following may characterize monopoly

Substantial market power.

If a new sushi restaurant opens, then

The market supply curve for sushi will shift to the right.

Which of the following is likely to be a monopolist

a drug firm that has a patent granting it the exclusive right to produce a drug

In a competitive market where firms are earning economic profits, which of the following should be expected as the industry moves to long-run equilibrium, ceteris paribus?

a lower price and more firms

If all of your friends use the same instant messaging service provider, you are likely to use it too. This behavior may create

a network economy

Which of the following is a common barrier to entry in a monopoly market

a patent on a new product

If economic profits are earned in a competitive market, then over time

additional firms will enter the market

Which of the following is not a determinant of market power

age of industry

The price charged by a profit-maximizing monopolist occurs

at a price on the demand curve above the intersection where MR=MC

(Figure 23.6) For a perfectly competitive firm, given the current market price, we expect to see

exit from this industry

If a firm can change market prices by altering its output, then it

has market power

If a firm in an oligopoly expands its market share at prevailing prices, its competitors

lose market share

In a monopoly and perfect competition, a firm should expand production when

marginal revenue is above marginal cost

The demand curve will be kinked if rival oligopolists

match price reductions but not price increases

Which of the following may not characterize an oligopoly

no market power

The concentration ratio for an oligopoly is considered

over 60 percent

The pricing strategy in which there is an explicit agreement among producers regarding price is called

price-fixing

For a monopolist, marginal revenue equals

the change in total revenue divided by the change in quantity

If the price of ricotta cheese, an ingredient in lasagna, increases, then

the market supply curve for lasagna will shift to the left

(Figure 24.1) The shaded area represents

total profit

(Figure 23.5) If a perfectly competitive firm produces the level of output corresponding to point B, it will earn

zero economic profit

Which of the following is characteristic of a perfectly competitive market?

zero economic profit in the long run


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