MICRO FINAL

Which of the following statements applies to a purely competitive producer?

A) It will not advertise its product

Which of the following industries most closely approximates pure competition?

A) agricultural

In pure competition, the marginal revenue of a firm always

D) marginal cost

Whenever a monopolist demand curve is down sloping:

D) marginal revenue is less than price

An industry comprised of a very large number of sellers producing a standardized product is known as:

D) pure competition

The demand curve in a purely competitive industry/market is ______, while the demand curve to a single firm in that industry is ____________

B) downsloping, perfectly elastic

A monopolistic structure has elements of a monopoly because:

C) product differentiation allows for some individual seller power

Which of the following approximates a pure monopoly?

C) the diamond market

Firms seek to maximize:

C) total profit

Which of the following is not a basic characteristic of pure competition?

A) considerable non-price competition

The MR=MC rule:

A) demand and marginal revenue curves

The quantity from the minimum ATC and the monopolistically competitive profit maximizing quantity is called:

A) excess capacity

If a pure monopolist is producing at that output where P=ATC, then:

A) its economic profits will be zero

An industry comprised of a large number of sellers with no barriers to entry, where each firm has a small market share and sell differentiated products is an example:

A) monopolistic competition

A pure monopolist:

A) will realize an economic profit if price exceeds ATC at the profit-maximizing/loss-minimizing level of output

A perfectly elastic demand curve implies that the firm:

B) can sell as much output as it chooses at the existing price

A purely competitive firm does not try to sell more of its product by lowering its price below the market price because:

B) it can sell all it wants to at the market price

The demand schedule or curve confronted by the individual purely competitive firm is:

B) perfectly elastic

What characteristic would best be associated with pure competition?

B) price taker

In the short run a purely competitive firm which seeks to maximize profit will produce:

B) where total revenue exceeds total cost by the maximum amount

If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue

B) will also be $5

Which of the following is correct?

C) A purely competitive firm is a "price taker," while a monopolist is a "price maker."

Price is constant or given to the individual firm selling in a purely competitive market because:

C) each seller supplies a negligible fraction of total supply

Which set best describes the basic features of monopolistic competition?

C) easy enter, many firms, and differentiated products

The demand curve for a monopolistic firm is:

C) is more elastic than a monopoly demand curve

To maximize profit a pure monopolist must:

C) maximize the difference between total revenue and total cost

Monopolistically competitive firms:

C) may realize either profits or losses in the short run, but realize normal profits in the long run

A monopolistically competitive industry combines elements of both competition and monopoly. The monopoly element results from:

C) product differentiation

A pure monopolist is:

D) a one-firm industry

When a purely competitive firm is in long-run equilibrium:

E) all of the above (marginal revenue equals marginal cost, price equals marginal cost, total revenue equals total cost, minimum average total cost equals price)