MICROECONOMICS FINAL EXAM HW 3

Use the data in the table above. If the firm produces the profit-maximizing level of production, how much profit will the firm earn?

$6

in the above figure, the firms total economic profit is equal to

$60

Use the data in the table above. The marginal cost of producing the 4th unit is

$8

Use the data in the table above. What is the total revenue from selling 7 units?

$840

Suppose that a firm operating in perfectly competitive market sells 400 units if output at a price pf $4 each. Which of the following statements is correct?

(i) and (iii) only

Consider the perfectly competitive firm in the above figure. The profit maximizing level of output for the firm is equal to

17 units

Dee's TV repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what quantity of TV repairs should Dee undertake?

20 per week

In the above figure, the firm will produce

20 units

The figure above shows the demand and cost curves for a single-price monopoly. What level of output maximizes the firms economic profit?

20 units

Use the data in the table above. At which level of production will the firm maximize profit?

3 units

The unregulated, single-price monopoly shown in the figure above will sell

30 tickets

In the above figure, if the firm is in monopolistic competiton, it will produce

40 units

Use the data in the table above. If the firm doubles its output from 3 to 6 units, total revenue will

increase by exactly $15

Consider the perfectly competitive firm in the above figure. At the profit maximizing level of output, the firm is

incurring an economic loss equal to $119.00

In the short run a perfectly competitive firm will

shut down if P < AVC

A monopolistic competitve firm has ____________ power to set the price of its product because _____________.

some; of product differentiation

Consider the perfectly competitive firm in the above figure. What will the firm choose to do in the short-run and why?

stay in business because the firms economic loss is less than fixed costs

In the above figure, the marginal cost of the last unit produced by the profit maximizing firm is

$10

In the above table, the average revenue when 14 units are produced and sold is

$11

In the above table, the price of the product is

$11

Consider the perfectly competitive firm in the above figure. The shutdown point occurs at a price of

$11.00

Use the data in the table above. What is the average revenue when 4 units are sold?

$120

Use the data in the table above. What is the marginal revenue from selling the 3rd unit?

$120

Dee's TV repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what is the amount of economic profit made or loss incurred at the quantity of TV repairs that profits are maximized or losses minimized?

$200

The figure above shows the demand and cost curves for a single-price monopoly. What economic profit does this firm make?

$200

The monopoly illustrated in the figure above is unregulated and charges a single price. The deadweight loss created by the monopoly is

$22.50

Suppose that a firm operating in a competitive market is currently maximizing its short-run profit at an output of 50 units. If the current price is $9, the marginal cost of the 50th unit is $9, and the average total cost of producing 50 units is $4, what is the firms profit?

$250

In the above figure, if the firm is in monopolistic competiton, its price will be

$3

The figure above shows the demand and cost curves for a single-price monopoly. What price will the firm charge?

$30 per unit

In the figure above, compared to a perfectly competitive industry with the same costs, a single-price, unregulated monopoly will raise the price by

$4.00 per unit

A monopolistically competitive firm and a monopoly are alike because both

I and II

A perfectly competitive firm maximizes its economic profit when it produces the quantity thats sets

MR = MC

A monopoly can price discriminate between two groups of consumers if each group has __________________.

a different willingness to pay

Which of the following is barrier to entry for a monopoly?

a patent

In perfect competition, an individual firm

determines the quantity it sells in the marketplace but has no influence over its price.

Which of the following is NOT a characteristic of a perfectly competitive industry?

each firm produces a slightly differentiated product

For a competitive firm,

average revenue equals marginal revenue

Use the data in the table above. Over which range of output is average revenue equal to price?

average revenue is equal to price over the entire range of output

All of the following characteristics apply to monopolistic competition EXCEPT

each firm produces the same identical product

Unregulated monopolies can often make an economic profit in the long run because

barriers to entry prevent competing firms from entering the market

In the above figure, the monopolistically competitive firm makes an economic profit of

between $0 and $50 per day

When a firm is considered to be a "price taker" that means that the firm

cannot influence the market price of the good that it sells

Use the data in the table above. The price and quantity relationship in the table is most likely a demand curve faced by a firm in a

competitive market

In a competitive market, the actions of any single buyer or seller will

have a negligible impact on the market price

Which of the following is NOT a characteristic of a monopoly?

easy entry and exit

Today, firms in a perfectly competitive market are making an economic profit. In the long run, firms will _________ the market until all firms in the market are _______.

enter; making zero economic profit

Suppose firms in a perfectly competitive market are earning an economic profit. As new firms enter, the price ____________ and the economic profit of each existing firm _______________.

falls; decreases

The above figure is for a firm in monopolistic competition. The diagram represents the short run rather than the long run because the

firm is making an economic profit

In perfect competition

firms face no restrictions on entry into market

A natural monopoly

is an industry in which economies of scale exist at the level of output where the market demand curve intersects the long-run average cost curve

The above figure shows a monopolistically competitive firm in the short run. During the transition to the long run, the demand curve will shift ____________ and the MR curve will shift _____________.

leftward; leftward

Consumer surplus is

less in the case of a single-price monopoly than in the case of a perfectly competitive industry

In the short run, a firm operating in a competitive industry will shut down if price is

less than average variable cost

The fundamental reason a single-price monopoly creates a deadweight loss is that compared to the efficient outcome, the single-price monopoly

restricts output

For a single-price monopolist to sell one more unit of a good, it must

lower the price on all units sold

A price discriminating monopolist charges lower prices to customers with

lower willingness to pay

Monopolistic competition is defined as a type of marker structure where

many firms produce the good

In monopolistic competition, in the short run a firm maximizes its profit by selecting an output at

marginal revenue

At the profit-maximizing level of output,

marginal revenue equals marginal cost

Single-price monopolies maximize profit by producing the amount of output where

marginal revenue is equal to marginal cost

When marginal revenue equals marginal cost, a perfectly competitive firm is

maximizing its profit

A major difference between a single-price monopolist and a perfectly competitive firm is that the

monopolists marginal revenue is less than price

Compared to a single-price monopoly, a perfectly competitive market with the same costs produces _____________ output and has a ______________ price.

more; lower

Which of the following statements regarding a competitive market is not correct?

price exceeds marginal revenue

Which of the following is true for BOTH monopoly and a perfectly competitive firm?

profits are maximized by producing at the level of output where marginal revenue is equal to marginal cost.

What condition must exist for a monopolist to effectively price discriminate?

the monopolist must produce a good that cannot be resold

Which of the following is NOT an assumption of perfect competition?

the price each firm sets differs from the prices set by the other firms

When comparing perfect competition to a single-price monopoly with the same costs,

there is a deadweight loss associated with a monopoly