Econ Chapters_14_15_16_17_21
maximizing profit.
By comparing marginal revenue and marginal cost, a firm in a competitive market is able to adjust production to the level that achieves its objective, which we assume to be
is zero
Refer to Figure 14-6. When market price is P3, a profit-maximizing firm's profit
$0.
Refer to Figure 15-18. If the monopoly firm perfectly price discriminates, then consumer surplus amounts to
P=$36, profit=$0
Refer to Figure 16-2. Suppose that average total cost is $36 when Q=24. What is the profit-maximizing price and resulting profit?
$800
Refer to Figure 16-4. What price will the monopolistically competitive firm charge in this market?
not in long-run equilibrium.
Refer to Figure 16-5. Panel b is consistent with a firm in a monopolistically competitive market that is
$2.
Refer to Figure 17-1. Suppose this market is served by two firms who each face the marginal cost curve shown in the diagram and have zero fixed cost. The marginal revenue curve that a monopolist would face in this market is also shown. If the firms are able to collude successfully, each firm should earn a profit equal to
B
Refer to Figure 21-16. The price of X is $25, the price of Y is $25, and the consumer's income is $100. Which point represents the consumer's optimal choice?
1/3
Refer to Figure 21-5. In graph (b), what is the price of good X relative to the price of good Y (i.e., Px/Py)?
40
Refer to Figure 21-7. Suppose a consumer has $200 in income, the price of a book is $5, and the price of a DVD is $10. What is the value of A?
6
Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?
5 units
Refer to Table 15-19. If a monopolist faces a constant marginal cost of $1, how much output should the firm produce in order to equate marginal revenue with marginal cost?
Nadia: Don't Clean Maddie: Don't Clean
Refer to Table 17-20. What is the Nash Equilibrium in this dorm room cleaning game?
a. perfect competition b. monopolistic competition c. monopoly
In which of the following market structures can a firm earn an economic profit in the short run?
a. are normal goods b. an inferior goods c. are luxury goods d. could be any of the above
A decrease in the price of DVD players leads consumers to buy more DVD players. From this information we can conclude that DVD players
price is less than average variable cost.
A profit-maximizing firm will shut down in the short run when
the cooperation of their members.
All cartels are inherently reliant on
produce a total quantity of output that falls short of the Nash-equilibrium total quantity.
As a group, oligopolists earn the highest profit when they
neither firm is able to improve its outcome on its own.
Assume that two firms in an oligopoly market are unable to collude. Once the Nash Equilibrium is reached
produce 3 units in the short run and exit in the long run.
If the market price is $4, this firm will
$70
If the price of X is $20, then what is the price of Y?
A. positive economic profits. B. economic losses. C. zero economic profits. D. All of the above are possible. Answer: All of the above are possible
In the short run, a firm operating in a monopolistically competitive market can earn
$13,000.
Scenario 15-3A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. Refer to Scenario 15-3. At Q = 500, the firm's profit is
$125,000
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc. Refer to Scenario 15-6. How much profit will the concert promoters earn if they engage in price discrimination?
maximize utility.
The goal of the consumer is to
$13
The table represents a demand curve faced by a firm in a competitive market. Refer to Table 14-3. For this firm, the price is
marginal revenue equals marginal cost.
To maximize its profit, a monopolistically competitive firm chooses its level of output by looking for the level of output at which
the players play the game not once but many times
Very often, the reason that players can solve the prisoners' dilemma and reach the most profitable outcome is that
operating at the efficient scale
When all firms and potential firms in a market have the same cost curves, the long-run equilibrium of a competitive market with free entry and exit will be characterized by firms
the marginal cost curve determines the quantity of output the firm is willing to supply at any price.
When price exceeds average variable cost in the short run, a competitive firm's marginal cost curve is regarded as its supply curve because
a consumer cannot be made better off without an increase in her income or a price decrease in one of the goods she consumes.
When the indifference curve is tangent to the budget constraint,
A. a simultaneous decrease in the price X and the price Y B. an increase in income and an increase in the price Y C. a decrease in income D. Both a and b are correct Answer: D. Both a and b are correct
Which of the following could explain the change in the budget line from A to B?
an increase in income and an increase in the price of X
Which of the following could explain the change in the budget line from A to B?
U.S. Postal Service
Which of the following is an example of public ownership of a monopoly?
free entry and exit
Which of the following is not a characteristic of a monopoly?
Policymakers have the difficult task of determining whether some firms' decisions have legitimate purposes even though they appear anti-competitive.
Which of the following statements is true?
You should go home and read a book.
You purchase a $30, nonrefundable ticket to a play at a local theater. Ten minutes into the show you realize that it is not a very good show and place only a $10 value on seeing the remainder of the show. Alternatively you could leave the theater and go home and watch TV or read a book. You place an $8 value on watching TV and a $12 value on reading a book.
marginal cost and marginal revenue
he monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?
a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles
Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the income effect associated with an increase in the price of a textbook will result in
(iii) only
Monopolistically competitive markets differ from perfectly competitive markets due to (i) the number of sellers. (ii) the barriers to entry. (iii) the product differentiation among the sellers.