Econ final

Refer to the graphs below what do you expect to happen in this perfectly competitive market as it approaches long-term equilibrium

The price will decrease until it is equal to the minimum of average total cost and profits will become zero

Which of the following measures is conceptually the same as price

average revenue

Refer to the graph below which of the curves in the grasary for determining the level of output that maximize profit for a perfectly competitive firm

The ATC curve

Refer to the graph of cost for a perfectly competitive firm below which of the following best represents profit per unit The shaded rectangle The distance between point a and B The market price None of the above

The distance between point a and B

If increased competition leads to higher cost and higher prices in the industry how should that market be characterized

As a natural monopoly

REI and level nine sports are competing over the price of gloves what is the dominant strategy

Both firms will charge $50

Which of the following types of firms use the marginal revenue equals marginal cost approach to maximize profits

Both perfectly competitive and monopolistically competitive firms

Using the broader definition of​ monopoly, in which of the following cases could we argue that Microsoft has a monopoly in computer operating​ systems?

If Macintosh and Linux were not considered close substitutes for windows

Refer to the graph below the loss in revenue from decreasing price is greater than the gain in revenue from increasing price whenever

Marginal revenue is negative

Referred to the graph below based on the information on the graph what is true about marginal revenue

Marginal revenue remains constant as the quantity of bushels sold increases

What is the definition of market

Market power is the same as inefficiency as measured by the amount of deadweight loss from a monopoly

For what type of market structures demand curve the same as marginal revenue

Perfect competition

To maximize profit which of the following should a firm attempt to do

find the largest difference between total revenue and total cost

The more cell phones and use the more valuable they become to consumers this is an example of

network externalities

If automobile companies have significant bargaining power when buying tires, you would expect that

tire prices will be low.

What is the dominant strategy of eBay auction participants

to place a bid equal to the maximum value you place on the item

Every game has these characteristics:

rules, strategies, and payoffs

A patent typically gets a hold are exclusive right to the product for a period of

20 years

Refer to the table below based on the numbers in the table how much of this farmer produce in order to maximize profit

6 bushels

Which of the following is the definition of business strategy

A business strategy refers to actions taken by firms to attain their objectives

A group of firms that concludes by agreeing to restrict output to increase prices and profit is called

A cartel

A strategy that is the best for a firm no matter what strategies others firms use is

A dominant strategy

A buyer or seller that is unable to affect the market price is called

A price taker

Refer to the graphs below the perfectly competitive firm represented in this graph on the right is experiencing

A profit in the short run

Refer to the graphs below what do you expect to happen in this market as it approaches long run equilibrium

A shift to the right of the market supply curve as new firms enter

Which of the following are characteristics of a perfectly competitive industry Firms are unable to control the prices of the products they sell Firms are unable to earn an economic profit in the long run Firm sell identical products All of the above

All of the above

Which of the following are effects of monopoly Monopoly cause a reduction in consumer surplus Monopoly causes an increase in producer surplus Monopoly cause a reduction in economic efficiency All of the above

All of the above

Which of the following is a barrier to entry Economies of scale Ownership of a key input Patents all of the above

All of the above

Which of the following types of firms use the marginal revenue equals marginal cost approach to maximize profit Perfectly competitive firm Monopolistic competitive Monopoly All of the above

All of the above

Which firms face a downward sloping demand curve in a downward sloping marginal revenue for

All price makers

For the graph below which of the curse is not necessary for determining the level of profit earned by a perfectly competitive firm

All three curves are needed to determine the level of profit earned by a perfectly competitive firm

Suppose you invest $200,000 in a business the return you could earn each year on a similar investment using that money is 10% or 20,000 in an economic sense the 20,000 is

An economic cost

Dominoes in Little Caesars Arkham feeding over the price of pizza what is the dominant strategy

Both firms charge five dollars

Why does monopolistically competitive firm have a downward sloping demand curve

Because changing the price will affect the quantity sold

Economic loss refers to the situation in which a firms total revenue is less than its total cost. To calculate the amount of a loss which of the following costs would be included

Both explicit cost and implicit cost

Assume that an industry that began as a perfectly competitive industry becomes a monopoly which of the following describes a change in the market as a result of big compared to when the industry was perfectly competitive the monopolist will

Charge a higher price and produce less outlet

An agreement among firms to charge the same price or to otherwise not compete is

Collusion

Economies of cell help determine the extent of

Competition in an industry

What trade-offs do consumers face when buying a product from a monopolistic competitive firm

Consumers pay aPrice greater than marginal cost but also have choices more suitable to their taste

How does the entry of new coffee houses affect the profits of existing coffee houses

Entry will decrease the profits of existing coffee houses by shifting each of their individual demand curves to the left and making the demand curves more elastic

Which of the following rights is given to the holder of a patent

Exclusive right to a new product

Fill in the blanks with the word and phrase that best The history of OPEC sustaining high prices has been _________ because members often __________ their output quotas

Difficult produce more than

Which type of barrier to entry is the granting of a parent copyright to this individual or a firm considered

Entry blocked by government action

Refer to the graph below the graph on the left pics demand and supply in the competitive market for a wheat the graph on the right to fix the demand curve facing farmer waffle an individual producer in the market for wheat the demand curve for from her waffles wheat is horizontal in the market price of four dollars because

Farmer waffle is a price taker

Fill in the blanks suppliers have more bargaining power when ___________ firms can supply the input and the input _________ specialized

Few is

Which of the following are characteristics of monopolistic competition

Firm sets similar but not identical products

How do you find the profit maximizing quantity for a firm under monopoly

For all firm types it is the same process. Go to the point where MR = MC. Then find the quantity on the x-axis below MR = MC.

How do you find the profit maximizing quantity for a perfectly competitive firm

For all firm types, it is the same process. Go to the point where MR = MC. Then find the quantity on the x-axis below MR=MC.

If individual countries that are members of OPEC exceed their production quarters the amount of oil supplied to the world ______ and the price of oil _____

Increases decreases

When a firms demand curve slopes downward and the firm decides to cut price which of the following happens

It sells more units but receives lower revenue per unit.

Economies of scale exist when a firms __________ average cost fall as it __________ output

Long run increases

Which of the following statements regarding natural monopoly is true

Nacho monopoly is most likely to occur in markets were fixed costs are very large relative to variable costs

Match the following definition with one of the terms below a situation where each firm chooses the best strategy given the strategies chosen by other firms

Nash equilibrium

What is the name given to the situation where economies of cells are so large that one firm can supply the entire market at a lower average total cost them more than two firms

Natural monopoly

Which type of efficiency is achieved by a monopolistic competitive firm in the long run

Neither allocated nor productive efficiency

Is zero economic profit in evitable in the long run for a monopolistic competitive firm

No a firm could try to continue making a profit in the long run by reducing production costs and improving it products

If an individual firm in a perfectly competitive market increases it's price the formal experience Higher revenue Lower average total cost Increase sales None of the above

None of the above

Which of the terms below is defined as a market structure in which a small number of inter-dependent firms compete

Oligopoly

What is the relationship between price average revenue and marginal revenue for a firm and a perfectly competitive market

Price is equal to both average revenue and marginal revenue

Which of the following terms best describes how the result of the forces of competition drives the market price to the minimum average cost of the typical firm Allocated efficiency Productive efficiency Decreasing cost industry Competitive mark down

Production efficiency

Refer to the graph below of the demand curve facing a firm in the perfectly competitive market for wheat the fact that the demand curve is horizontal in place which of the following

The firm can sell any amount of output as long as it excepts market price of four dollars

Refer to the graph below if a perfectly competitive firm is producing at point a which of the following is true

The firm earn zero economic profit

If marginal revenue stops downward which of the following is true

The firm must decrease its price to sell a larger quantity

If a firm has the ability to affect the price of the good or service at sells what is the relationship between it's marginal revenue curve and it's demand curve

The firm will have a marginal revenue curve that is below its demand curve

If market demand shifts to the right how will a competitive firms level of output change

The firm will increase its output and its profits will increase

In the broader sense game theory studies the decisions of firms in industries where the profits of each firm depend on

The firms interaction with other firms

If firms in a perfectly competitive industry are earning positive profits what would you expect to see in the long run

The market supply curve will shift to the right as firms into the market prices will fall and profits will fall

When I monopolistic competitive firm decrease his price good and bad things happen which of the following is considered a good thing for the firm

The output effect

When are monopolistically competitive firm decrease his price good and bad things happen which of the following is considered a bad thing for the firm

The price effect

Long run competitive equilibrium is

The situation which the entry and exit of firms has resulted in the typical firm just breaking even

Which of the following conditions must exist in order to have a perfectly competitive market There must be many buyers and many sellers all of whom are small relative to the market The products sold by firms in the market must be different from each There must be some barriers to entry in order to protect perfect competition All of the above

There must be many buyers and sellers all of whom are small relative to the market

Which of the following situations can a firm be considered a monopoly

When a firm can ignore the actions of all other firms

What level of output should be produced in order to maximize profit

Where marginal revenue and marginal cost equal each other

What are laws aimed at promoting competition among firms called

antitrust laws

Which of the terms below is defined as anything that keeps new firms from entering an industry in which firms are earning economic profits

barriers to entry

What is a merger between firms in the same industry called

horizontal merger

Which of the following is most likely to increase Market Power

horizontal mergers

Which of the following terms best describes the additional revenue associated with selling an additional unit of output

marginal revenue

Which of the following market structures is the firms demand curve the same as the market demand for the product

monopoly

Which term best describes the minimum amount that a firm needs to earn on a $100,000 investment to be willing to remain in a perfectly competitive industry in the long run

opportunity cost

What is marginal cost

the cost of producing one more unit of a good