Lesson 8-10 Practice Q
In the table above at an output of four units the amount of economic profit is _________
zero
In Figure 9.1 above the Monopolistic Competitor would produce with a total economic profit of _____________.
$285
In Figure 9.1 above the Monopolistic Competitor would produce at a price of _________ .
$5.20
Consider the economic data in the table below. Assume that the price and marginal revenue are $25. If this firm produced at Q = 3, it would incur a economic loss of $ _____
0
Consider the following purely competitive supply and demand relationships in Figure 7.1 below, representing an industry and a firm. The equilibrium price for this product is $ ___
3
In Figure 8.3 above, the maximum profit price is at $ _________.
300
There are __________ types of firms (market models) within capitalism, each with varied cost and revenue relationships.
4
Which of the following features are characteristic of monopolistic competition?
All the above
Changes in the pricing schedule are very frequent in the airline industry and often occur on a minute by minute basis.
F
Monopolies charge the highest price that they can.
F
Using the letter labels on Graph 7.5 above, a firm with these costs and taking a market price of G would have a total economic profit box of ___________ .
GLFK
Barriers to entry that can create a monopoly include ______________ .
Legal barriers
All firms, including the one illustrated in the table above, will maximize profits (or minimize losses) where ___________ and set price on the demand curve at this quantity.
MR = MC
competition assumes perfect market information (everyone in the market knows the price of the good or service).
Perfect
In order for _______________ to occur, a firm must have sufficient monopoly power to control both the price and output.
Price discrimination
_______________ occur(s) in many firms such as with airline ticketing.
Price discrimination
___________ makes similar products different by meeting consumer needs in varied ways.
Product differentiation
_________ is defined in microeconomics as one producer with no convenient substitutes who is a price maker.
Pure monopoly
Allocative efficiency in pure competition is maximum output with minimum resource input and producing what consumer's desire.
T
An individual producer in pure competition has a perfectly elastic demand line and the same value for price, marginal revenue, and average revenue.
T
In a purely competitive model an individual producer has marginal revenue = marginal cost = price = average revenue.
T
In some situations firms must be assured of infrequent price changes and limited competition in order to invest and adopt technology for the longer-term.
T
In the graph below the economic profit at price Pn will be zero.
T
Price (set by the market in pure competition) always remains the same.
T
Since perceived or real differences are important in monopolistic competition markets, advertising is a means of relating such advantages to customers.
T
Some critics of oligopoly state that there is neither government control nor any efficiency in this model.
T
The Oligopoly model is unique and difficult to analyze because products within this model may be either identical (homogenous) or different (heterogeneous).
T
The barriers to entry enjoyed by a monopolist weaken the incentive to be technologically progressive.
T
In the pure competition model each contributor to the productive process is paid _________________ .
according to their contribution to that productive process
Industry examples of the break-down of "barriers to competition" by advances in technology and the ensuing loss of monopoly power include _________________ .
all the above
In the "dilemma of regulation" the fair-return price (P = ATC) yields a normal profit to assist the continued operation of the monopoly firm, but falls short of ________________________ from society's perspective.
allocative efficiency
Perfect competition -- Buyers and sellers in this market act to maximize their own economic ____________ .
benefit
Nations or entities that have agreements to set market price and market share are called ____________.
cartels
Monopolies are able to restrict output because of their market power position established through___________.
entry barriers
Given the economic cost relationships in monopoly market, government can mandate a unit price equal to the ATC at a certain quantity to assure a(n) _____________ (the price that will cover the per unit cost which includes a normal profit).
fair-return price
If a market has eight suppliers, but the top _________ hold 70 percent of the total market, the industry is considered to be "concentrated".
four
Pure Competition has a ____________ number of producers.
large
In Figure 8.2 , MR is ___________ price at every point except the initial point.
less than
In the table above, in order to sell three units the producer had to reduce the price from $9to $8. Therefore, the _______________ is less than the price .
marginal revenue
Two of the three market models of imperfect competition are ______________.
monopolistic competition and oligopoly
The _____________ firm's demand curve is the same as the market demand for the product.
monopoly
In microeconomics each of the four market model results in a degree of efficiency thought by most economists to be _________ efficient than government operated production.
more
The characteristics of monopoly are ____________ represented within a capitalistic economy.
narrowly (about 6%)
The industry supply curve is the combination of the supply curves of a large number of producers, __________ of which, by their own individual actions, can change the supply curve.
none
Economic costs include a(n) _______ profit.
normal