Viegbesie
the only market structure in which there is significant interpendence amoung firms with regard to their pricing and output decisions is what?
monopoly
the correct ranking of barriers to entry (from highest to lowest) in the market is
monopoly, monopolistic competition, oligopoly, perfect competition
when the MPP of labor is zero what happens
no furtherincreases in output can be acheived by using additional units of labor
The pricing strategy in which one firm is allowed by its rivals to establish the market price for all firms in the market is called?
overt Collusion
to maximize profits or minimize losses, a monopolist should at so that
p=AC
a regulated natural monopoly is more likely to advertise freely under which of the following types of regulation
profit regulation
oligopolists have a mutual interest in coordinating production decisions in order to maximize combined what
profits
A market in which a single seller is required for efficient production is a
pure monopoly
The labor-supply curve depicts the?
quantities of labor supplied at alternative wage rates
the first major regulatory target in the United States was
railroads
Economic regulation includes:
regulation of prices
the collapse of AT&T's natural monopoly in long distance telephone service was cause by
satellite technology which made it easier and less expensive for new companies to provide long-distance service
The number of firms in an oligopoly must be what?
small enough so that one firm's decisions have significant impact on the decisions of the other firms in the industry
the creation of another antitrust agency besides the justice department was accomplished through what?
the Federal Trade Commission act
What prohibits price discrimination, certain types of mergers, and interlocking boards of directors among competing companies
the Sherman Act
what market best illustrates the practice of price discrimination
the airline market
Which of the following is the same for monopoly and competitive under the same cost and demand conditions?
the amount of output that is produced
Price discrimination
the business practice of selling the same good at different prices to different customers
a clothing store can sell two shirts for $20 each or three shirts for $18 each. At a quantity of three shirts sold, marginal revenue is
$14
suppose that a monopoly firm produces tables and can sell 10 tables per month at a priceof $400 per table. in order to increase sales by one table per month, the monopolist must lower the price of its tables by $30 to $370 per table. what is the marginal revenue of the eleventh table?
$70
In what market structures are entry barriers the highest?
monopoly
monopoly power
A firm with monopoly power has some control over price
A market that experiences both strikes and lockouts at different times is most likely characterized by?
Bilateral Monopoly
A multiplant monopolist produces more than if each of its plants were separate firm in a competitive market
False
If marginal revenue product is declining, the marginal physical product must decline.
False
Regulated monopolies that are allowed a specific profit rate have an incentive to hold down costs
False
Unlike most monopolies, unions do not attempt to use their market power to raise the equilibrium wage above its competitive level
False
Jane loves to work. she does not receive any enjoyment from leisure time. the last dollar that she earns each year means just as much to as the first. what describes the shape of Jane's labor supply curve?
Horizontal
the law of diminishing returns states that
MPP of labor declines as more labor is employed
what rules will always be satisfied when any firm has maximized profits?
MR=MC
Oligopolistic firms will maximize total profits for all of the firms in the market at the rate of output
MR=MC for the market
Market failure includes:
Market power resulting in reduced output and higher price
which market structure is characterized by a few interdependent firms?
Oligopolistic
The soft drink market is dominated by Coke, Pepsi, and very few other firms. the firms often start price wars. How best is the market classified?
Oligopoly
Price descrimination allows a producer to what?
Reap the highest possible average price for the quantity
Ceteris paribus, if immagration to the United States increases the number of workers what will happen
The labor-supply curve will shift to the right and the equilibrium wage rate will fall
A monoposonist must raise the wage rate if it desires to hire additional workers.
True
Antitrust laws can restrain the abuse of monopoly power
True
If close substitutes are available which have only slight product differentiation, a firm is not a monopoly
True
the opportunity cost of working is the amount of leisure time that must be given up in order to work.
True
the long-run average total cost curve of a natural monopolist is?
U-shaped
when a regulatory agency hires personnel to enforce regulations, the cost is
a compliance cost
what is likely to be a monopolist
a drug firm that has a patent granting it the exclusive right to produce a drug
compared with the profit-maximizing choice of a natural monopolist, output regulation will result in what
a higher level of output and a lower price
a gap in the marginal revenue curve results from
a kinked demand curve
the refusal to work by unionized labor is an example of what
a strike
which of the follwoing may characterize oligopolistic behavior
all of them
economies of scale over the entire range of market output
all the above
the danger of experimenting with pricing for an oligopoly is
all the above
the doctrine of laissez faire is consistent with what?
all the above
what is an example of government failure?
all the above
according to the text, what type of market failure provides the best case for government regulation
market power
At very high wage rates, it is likely than individual's labor-supply can what?
bend backwards
when firms have the power to restrict output, raise prices, stifle competition, and inhibit innovation the market failure involves what?
market power
the marginal revenue product of labor is equal to what
change in total revenue/ change in quantity of labor
what is marginal wage
change in total wages paid/ change in quantity of labor employed
the marginal factor cost is what?
change in total wages/ change in quantity of labor
an individual's labor-supply curve reflects his or her what?
choice between work and leisure
when officers of firms in an industry get together to discuss how they can improve their mutual well-being, the result is
collusion
The most common form of non-price competition is what?
collusion, advertising, patents
which regulatory cost is borne by the firms which are regulated
compliance costs
one could argue that advertising
creates barriers to entry
which of the following is a barrier to entry in a monopoly market
difficulty in obtaining resources
the demnad for labor is downward sloping because
diminishing returns to labor
what is the supply curve for a monopolist?
does not exist
The concept of Laisesez faire calls for government intervention if market failure is evident
false
when there is market failure
government intervention is beneficial only when the marginal benefit of intervention exceeds the marginal cost
Typical goals of a labor union in the United States include what?
higher wages, better working conditions, more job security
a monpolist wo dies not practice discrimination should never produce in the
inelastic portion of its demand curve because its can increase total revenue by more than it increases toal cost by reducing the price
if a firm can raise market price by reducing its output, then what?
it faces a downward-sloping demand curve
the responsiveness of workers to a change in wage rates, ceteris paribus, is measured by what?
labor demand curve
a profit-maximization monosonist will hire workers at the point where the marginal factor cost curve intersects
marginal revenue product curve
competitive firms and monopolies both face downwar-sloping what?
market demand curves
when an individual's MRP is not measurable, his or her market wage is usually determined by
the individuals MPP
what firm is most likely to have more market power?
the only airline serving two cities
the demand curve faced by a monopoly firm is
the same as the amrket demand for the product
to be successful in changing wage rates and employment conditions, labor unions need to have control over what?
their own membership
as long as additional workers are attracted into the labor force by higher wages, the market labor supply curve is what?
upward-sloping
the quantity of labor demanded can change without shifting labor demand curve when there is a change in what?
wage rate
what will happen to wages and the level of employment in a competitive market when the government eliminates a minimum wage
wages will fall but employment will rise
if the selles of labor in a competitive market decided to unionize, what what would happen?
wages would rise and employment would fall