Econ test 3

feab

Based on the graph, under monopolistic competition economic profit is represented by rectangle:

a bakery charges a higher price for brownies than cookies

Which of the following is not an example of price discrimination?

It can earn an economic profit in the short run, but not the long run.

Which of the following is true about a monopolistically competitive firm?

monopolistic competition features many sellers

Which of the following is unique to a monopolistically competitive firm when compared to an oligopoly?

produce 5 units of output in the short run and face competition from new market entrants in the long run.

A firm in a competitive market has the following cost structure: If the market price is $16, this firm will

oligopoly

A market structure with only a few sellers, each offering similar or identical products, is known as

-$70.40

A monopolist can sell 300 units of output for $50 per unit. Alternatively, it can sell 301 units of output for $49.60 per unit. The marginal revenue of the 301st unit of output is

greater than the price effect

An oligopolist will increase production if the output effect is

dominant strategy

Assume that this Friday you would like to go to the club. You ask your friends to go with you, but they all want to go to the movies. Despite your friends not wanting to go with you, you decide to go to the club anyway because you really want to go dancing. This type of thinking BEST resembles a:

a product that is priced higher than it would be without the exclusive rights.

Granting a pharmaceutical company a patent for a new medicine will lead to

has many competitors

In both perfect competition and monopolistic competition, each firm

each prisoner to confess

In the prisoners' dilemma game, self-interest leads

Tyler should always choose don't clean

Matthew and Tyler are two college roommates who both prefer a clean common space in their dorm room, but neither enjoys cleaning. The roommates must each make a decision to either clean or not clean the dorm room's common space. The following table shows the payoffs for this situation, where the higher a player's payoff number, the better off that player is. What is Tyler's dominant strategy?

downward slope

One of the differences between perfect competition and monopoly is that the monopolistic firm's demand curve is

50

Only two firms sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. If this market were perfectly competitive instead of oligopolistic, what quantity would be produced?

Pablo earns $8,000 and Zak earns $8,000

Pablo and Zak are competitors in a local market. Each is trying to decide if it is better to advertise or not advertise. The table below gives the profits to each of them based on their strategy. What will the profits be if both follow their dominant strategy?

Q1 or Q2 only.

Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at

P>MC

Which of the following conditions is characteristic of a monopolistically competitive firm in both the short run and the long run?

giving riding lessons to fewer than 20 children a month

Robin owns a horse stable and riding academy and gives riding lessons for children at "pony camp." His business operates in a competitive industry. Robin gives riding lessons to 20 children per month. His monthly total revenue is $4,000. The marginal cost of pony camp is $250 per child. In order to maximize profits, Robin should

$30 and 100 units

Suppose a firm in a competitive market earned $3,000 in total revenue and had a marginal revenue of $30 for the last unit produced and sold. What is the average revenue per unit, and how many units were sold?

$400

Suppose a firm produces 20 units of output. At this level of output, ATC = 35, P = 55, MR = 30, and MC = 30. The firm's economic profit is:

continue to operate at 14 units

Suppose that a firm in a competitive market faces the following revenues and costs If the firm is currently producing 14 units, what would you advise the owners?

shut down because staying open would be more expensive

The accountants hired by Forever Fitness have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $125,000. Because of this information, in the short run, Forever Fitness should

produces and output level less than the socially optimal level

The deadweight loss associated with a monopoly occurs because the monopolist

higher than in monopoly markets and lower than in perfectly competitive markets.

The equilibrium quantity in markets characterized by oligopoly is

less than $3

The firm should shut down if the market price is

$20

The following table provides information on the price, quantity, and average total cost for a monopoly. What is the maximum profit that the monopolist can earn?

ignore;match

The kinked demand curve model assumes that if a firm raises its price, then its rivals will _____ the price increase, but if a firm lowers its price, its rivals will _____ the price decrease.

Marginal revenue is equal to marginal cost

The outputlevel that maximizes profit is where

the firm is the sole seller of this product

Which of the following is a necessary characteristic of a monopoly?

$11

The table represents a demand curve faced by a firm in a competitive market. For this firm, the marginal revenue of the 15th unit is

6 units

The table shows the demand schedule for a particular product. If the marginal cost of production in this market is $4, what is the socially efficient quantity of output?

sherman antitrust act of 1890

Two CEOs from different firms in the same market collude to fix the price in the market. This action violates the

(B − Y) × O

What area measures the monopolist's profit?

Price = X; quantity = J

What is the monopoly price and quantity?

decreases and marginal revenue decreases

When a monopolist increases the amount of output that it produces and sells, average revenue

a firm will have chosen its best strategy, given the strategies chosen by other firms in the market.

When an oligopoly market reaches a Nash equilibrium,

new firms will enter the market

When profit-maximizing firms in competitive markets are earning profits,

does not change

Whenever a perfectly competitive firm chooses to change its level of output, its marginal revenue

each firm has an incentive to deviate from its agreed output level.

cartels are difficult to maintain because

a larger number of firms will lead to a higher average total cost.

when an industry is a natural monopoly,

Profit = (quantity of output) × (price − average total cost)

which of the following expressions is correct for a competitive firm?