Econ 2020 Final exam

marginal revenue is equal to marginal cost

The profit-maximizing rule for a firm in a monopolistically competitive market is to always select the quantity at which

firms can enter and exit a market more easily in the long run than in the short run.c

A long-run supply curve is flatter than a short-run supply curve because

differentiated products, but not long run profits.

A monopolistically competitive market is characterized by

sellers are price makers rather than price takers.

A similarity between monopoly and monopolistic competition is that in both market structures

there are many firms in a single market.

In perfect competition as well as in monopolistic competition,

supply of the good.

Entry into a market by new firms will increase the

monopolistic competition

Hotels in New York City frequently experience an average vacancy rate of about 20 percent (i.e., on an average night, 80 percent of the hotel rooms are full). This kind of excess capacity is indicative of what kind of market?

perfectly elastic long-run market supply.

If the figure in panel (a) reflects the long-run equilibrium of a profit- maximizing firm in a competitive market, the figure in panel (b) most likely reflects

0

If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

210,000

If there are 700 identical firms in this market, what is the value of Q1?

The firm will earn zero profits in both the short run and long run.

In a competitive market the current price is $5. The typical firm in the market has ATC = $5.00 and AVC = $4.50.

firms can enter or exit the market without restrictions.

In a monopolistically competitive market

has many competitors

In both perfect competition and monopolistic competition, each firm (q5 in original)

Perfect competition Monopolistic competition Monopoly

In which of the following market structures can a firm earn an economic profit in the short run?

barrier to entry

John obtained a copyright for the song he wrote and recorded is an example of

each of the sellers offers a somewhat different product.

Monopolistic competition differs from perfect competition because in monopolistically competitive markets

is unlikely to improve market efficiency.

Regulation of a firm in a monopolistically competitive market

price discrimination

What do economists call the business practice of selling the same good at difference prices to different customers?

(P - ATC) × Q

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

The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve.

Which of the following best describes the idea of excess capacity in monopolistic competition?

ATC = demand and MR = MC

Which of the following conditions is characteristic of a monopolistically competitive firm in long-run equilibrium?

P > MC

Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium?

diseconomies of scale

Which of the following is not a reason for the existence of a monopoly?

exit if P < ATC

Which of the following represents the firm's long-run condition for exiting a market?

sunk cost

Which of these types of costs can be ignored when an individual or a firm is making decisions?

monopolies, but not competitive firms or monopolistically competitive firms

Which of these types of firms can earn a positive economic profit in the long run

in the long run.....

both monopolistically competitive and perfectly competitive firms produce where P = ATC.

competitive market

in what type of market does no single buyer or seller can influence the price of the product.

Monopolistic competition

is similar to monopoly because both market structures are characterized by firms being price makers rather than price takers.