Econ 304

Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm's total costs will be

$198.

Refer to the diagrams. With the industry structures represented by diagram

(A), there will be only a normal profit in the long run, while in (B) an economic profit can persist.

If columns 1 and 3 are this firm's demand schedule, the profit-maximizing level of output will be

4 units.

If columns (1) and (3) of the demand data shown are this firm's demand schedule, the profit-maximizing level of output will be

8 units.

For a monopolist to sell an output level of 10 units, the price must be $8. MR at this output level will be

< $8.

Which of the following is a characteristic of pure monopoly?

barriers to entry

A price-discriminating monopolist will follow a system where

buyers with inelastic demand are charged higher prices than buyers with elastic demand.

Suppose that entry of firms into the industry changes this firm's demand schedule from columns 1 and 3 to columns 2 and 3. Maximum economic profit will

decrease to $35.

Refer to the diagrams, which pertain to monopolistically competitive firms. Long-run equilibrium is shown by

diagram a only.

In long-run equilibrium, both purely competitive and monopolistically competitive firms will

equate marginal cost and marginal revenue.

"Price makers" refers to firms that

face a downward-sloping demand curve.

Refer to the diagram for a nondiscriminating monopolist. The profit-maximizing price for this firm is J.

false

Assume a pure monopolist is charging price P and selling output Q, as shown on the diagram. On the basis of this information, we can say that

if marginal costs were somehow zero, the firm would be maximizing its profits.

Refer to the above graph for a representative firm in monopolistic competition in a constant-cost industry. This firm is

in short-run equilibrium, but not long-run equilibrium.

Which of the following forces does not play a major part in the adjustments of a monopolistically competitive industry toward its long-run equilibrium?

introduction of new products and patents

The nondiscriminating pure monopolist must decrease price on all units of a product sold in order to sell more units. This explains why

marginal revenue is less than average revenue.

In the long run, a pure monopolist will maximize profits by producing that output at which marginal cost is equal to

marginal revenue.

Suppose the Herfindahl indexes for industries A, B, and C are 1,200, 5,000, and 7,500 respectively. These data imply that

market power is greatest in industry C

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

product differentiation

Excess capacity implies

productive inefficiency.

At equilibrium, the profit-maximizing monopolist facing the situation shown in the graph will face a negative

profit

Firms in an industry will not earn long-run economic profits if

there is free entry and exit of firms in the industry.

A firm sells 99 units of output when price equals $10, and 100 units of output when price equals $9. Its marginal revenue for the 100th unit of output is negative.

true

Which industry would be best characterized as monopolistically competitive?

web design consulting

A monopolist can sell 20 toys per day for $8.00 each. To sell 21 toys per day, the price must be cut to $7.00. The marginal revenue of the 21st toy is

−$13.