Micro Final

The Sherman Antitrust Act prohibits executives of competing companies from

even talking about fixing prices

When a profit-maximizing firm is earning profits, those profits can be identified by

(P-ATC)xQ

When a Monopoly pricing prevents some mutually beneficial trades from taking place. The unrealized, mutually beneficial trades are

A function of the reduction in the quantity produced by a monopolistic in comparison to a competitive market.

When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent

A transfer of benefit from the consumer to the producer

Which of the following is not an argument made by critics about advertising? Advertising manipulates peoples taste Advertising impedes competition Advertising promotes economies of sale Adverting increase the perception of product precipitation

Advertising promotes economies of sale

As a group oligopolistic would always earn the highest profit if they would

Charge the same price that a monopolist would charge if the market were a monopoly

The prisoners dilemma provides insight into the

Ease with which oligopoly firm maintain high prices

A market might have an upward-sloping long-run supply curve if?

Firms have different cost

Which of the following statements best expresses the firms profit-maximizing decision rule?

If a marginal revenue is greater than marginal cost, the firm should increase its output

Monopolistic competition is an inefficient market structure because

It has a deadweight loss, just as monopoly does

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

Profit=(quantity of output) x(price- average cost)

Which of the following industries is most likely to exhibit the characteristic of free entry

Tennis Shoes

According to one theory, advertising sends a signal to consumers about the quality of the product being offered. An implication of this theory is that

The content of the advertising is irrelevant

A firm in a competitive market currently produces and sells 500 doorknobs at the price of 10 per doorknob. Which event would decrease the firms average revenue?

The market price of doorknobs falls below 10 dollars

When a monopoly increases its output and sales

The output effect works to increase total revenue, and the price effect works to decrease total revenue.

Changes in the output of a perfectly competitive firm, without any change in the price of the product, will change the firm's

Total revenue

What is the shape of the monopolistic marginal revenue curve?

a downward- sloping line that lies below the demand curve

When a new McDonalds moves to a new small town the town should expect

a product variety - externally

Patents, copyrights, and trademarks

are examples of government created monopolies

In a particular town, Comvision and Vision are the only two providers of cable TV service. Comvision and Vision constitute a

duopoly, whether they conclude or not

Perfect price discrimination

eliminates deadweight lost

Consider a monopolistic competitive firm in a market in long-run equilibrium. This firm is most likely earning

no economic profit since it is charging a price equal to it average total cost