CHAPTER 11: BETWEEN COMPETITION AND MONOPOLY

In which of the following markets do sellers act as price takers? A Perfect competition B Monopoly C Cartel D Monopolistic competition

A

Tony's Gas Station and Robert's Gas Station are the only two gas stations in a small town of Westville. If Tony and Robert collude to earn more profits, which of the following would be true? A Each limit the amount of gasoline available and raise prices B Each limit the amount of gasoline available and lower prices C Each increase the amount of gasoline available and raise prices D Each increase the amount of gasoline available and lower prices

A

What do you think would happen in a commercial neighborhood near your home if a restaurant in that neighborhood were making a great deal of profit (select all that apply)? Multiple answers: You can select more than one option A In-and-Out burger will open a new franchise. B Domino's Pizza will move to this neighborhood from a rundown area of the town. C Chipotle will open a new store next door. D The restaurant will close down.

A B C

In which of the following markets do sellers have the highest profit level? A Perfect competition B Monopoly C Cartel D Monopolistic competition

B

Suppose that a local Italian restaurant is operating in a monopolistically competitive environment and is maximizing its profit. The price of spaghetti with meat sauce is $10 and the average total cost is $7. Based on this information, the firm is operating in the \_\_\_\_\_\_______ and we can expect \_\_\_\_\_\_______. A Short-run; firms to exit the the market B Short-run; firms to enter the market C Long-run; firms to exit the market D Long-run; firms to enter the market

B

Rank each type of market on their industry quantities from highest to lowest. Assume that there is a bit of competition among the oligopolies. 1 Oligopoly 2 Perfect competition 3 Monopolistic competition 4Monopoly

B D C A

A monopolistically competitive firm in the long run will produce an amount that is \_\_\_\_\_\_\________ the quantity where average cost is at a minimum and charge a price that is \_\_\_\_\_\_\________ marginal cost. A Equal to; greater than B Equal to; equal to C Less than; greater than D Less than; equal to

C

An oligopolistic industry with the same costs as a monopoly will have prices: A Equal to a monopoly price. B Greater than a monopoly price. C Less than or equal to a monopoly price. D Less than a monopoly price. E Greater than or equal to a monopoly price.

C

At the Fisherman's Wharf in San Francisco, there are a lot of seafood vendors. Suppose that there are twenty vendors selling steamed crab. If Tommy's crab shack sells 100 steamed crabs per day for $20 each, how much economic profit will Tommy earn in the long run? (Assume that the seafood vendors are operating in a monopolistically competitive market.) A 2000 B 1000 C 0 D There is not enough information

C

In the long run, a monopolistically competitive firm will produce where price _________. A Equals marginal cost and is greater than average cost B Equals marginal and average cost C Equals average cost and is greater than the marginal cost D Is greater than marginal and average cost

C

OPEC is an example of \_\_\_\_\_\_______. A Perfect competition B A monopoly C A cartel D Monopolistic competition

C

Which of the following is true for a profit-maximizing monopolistic competitor? A Marginal cost = price B Marginal cost> marginal revenue C Marginal cost = marginal revenue D Marginal cost < marginal revenue

C

A large number of firms in Biergarten sell flavored beer. However, each firm faces a downward-sloping demand curve. The market for flavored beer is \_\_\_\_\_\_\_\_\__________. A Perfectly competitive B A monopoly C A cartel D Monopolistically competitive

D

A monopolistic competitive firm will incur loss if which of the following is true? A Price is higher than average total cost B Price is equal to marginal cost C Price is lower than marginal cost D Price is lower than average total cost

D

Suppose that the Peached Tortilla is one of ten food trucks in the town of Happyville, and every food truck is earning substantial economic profits. What is likely to happen in the long run? A Some food trucks will exit the markets. B Some food trucks will lay off their employees because their profits are not high enough. C New food trucks will enter the market and continue to earn economic profits D New food trucks will enter the market and gradually all food trucks will earn zero economic profits. E There is not enough information

D

Rank each type of market on their prices from highest to lowest. Assume that there is a bit of competition among the oligopolies. 1 Oligopoly 2 Perfect competition 3 Monopolistic competition 4Monopoly

D A C B

Match each type of market with whether or not their price equals their marginal cost. YES OR NO? 1 Perfect competition 2 Monopolistic competition 3 Oligopoly 4 Monopoly

YES NO NO NO

Match each type of market with whether or not they can have economic profits in the short run. Drag and drop to match YES OR NO? 1 Perfect competition 2 Monopolistic competition 3 Oligopoly 4 Monopoly

YES YES YES YES

Match each type of market with whether or not they achieve economic efficiency. YES OR NO? 1 Perfect competition 2 Monopolistic competition 3 Oligopoly 4 Monopoly

YES NO NO NO

Match each type of market with whether or not their average costs at all outputs are as low as possible. YES OR NO? 1 Perfect competition 2 Monopolistic competition 3 Oligopoly 4 Monopoly

YES NO NO NO

Match each type of market with whether or not their average costs are at a minimum at the profit-maximizing quantity in the long run. 1 Perfect competition 2 Monopolistic competition 3 Oligopoly 4 Monopoly

YES NO NO NO

The long-run result of that advertising will be a(n) \_\_\_\_\_\_\________ in the price of the good. A Increase B Decrease C Increase or decrease D Not change

a

An increase in product differentiation created by advertising in a market with many firms will _______ the elasticity of demand facing the firm: A Increase B Decrease C Increase or decrease D Not change

b

Monopolistically competitive firms \_\_\_\_\_\_\_\_\__________ earn economic profits in the \_\_\_\_\_\_\_\_\__________. A May; short and long runs B May; long run only C May; short run only D Will not; either the short or long run

c

A single oligopolistic firm charging a price where industry marginal revenue is equal to marginal cost will be tempted to \_\_\_\_\_\_\________ prices, because it faces a more \_\_\_\_\______ demand if it alone changes its price. A Raise; inelastic B Raise; elastic C Lower; inelastic D Lower; elastic

d