Exam 2 Micro

the table shows the demand schedule facing Nina, a monopolist selling baskets. what is the change in total revenue if she raises the price from $10 to $12

$-120

a monopolist can sell 20 toys per day for $8.00 each. to sell 21 toys per day, the price must be cut to $7. the marginal revenue of the 21st toy is

$-13.00

Firm X Firm Y

$1,500,000

Answer question on the basis of the demand and cost data for a pure monopolist. at the profit maximizing price and quantity of output, the monopolist will realize profit of

$11.25

answer the question on the basis of the demand and cost data for a pure monopolist. the profit maximizing price for the monopolist will be

$2.50

the marginal revenue obtained from selling the third unit of output is

$3

the table shows the demand schedule facing nina, a monopolist selling baskets. what is the change in total revenue if she lowers the price from $20 to $18?

$30

the profit maximizing price for the monopolist will be

$4.50

a pure monopolist is selling six units at a price of $12. if the marginal revenue of the seventh unit is $5, then the

price of the seventh unit is $11

which of the following is not a characteristic of pure competition

pricing strategies by firms

the accompanying table shows cost data for a firm that is selling in a purely competitive market. if the market price for the firms product is $80, the firm will

produce 4 units

Refer to the accompanying cost table. if price of the product were $30 per unit, the firm would

produce 5 units and realize a loss of $50

which of the following is a barrier to entry?

patents and licenses

a purely competitive seller is

a "price taker"

the term oligopoly indicates

a few firms producing either a differentiated or a homogenous product

One feature of pure monopoly is that the firm is:

a producer of products with close substitutes

Pure monopoly refers to:

a single firm producing a product for which there are no close substitutes.

collusion refers to a situation where rival firms decide to

agree with each other to set prices and output

Alpha betas price policy question

beta can increase its profit by lowering its price

refer to the diagram for a purely competitive producer. if product price is p3

economic profits will be zero

long run adjustments in purely competitive markets primarily take the form of

entry or exit of firms in the market

in competition, each extra unit of output that a firm sells will yield a marginal revenue that is

equal to the price

the herfindahl index for the industry described in this table is

greater than it would be if there were only four firms in the industry

an industry having a four-firm concentration ratio of 85 percent

is an oligopoly

which of the following statements applies to a purely competitive producer

it will not advertise its own product

there would be some control over price within rather narrow limits in which market model

monopolistic competition

Pure monopolists may obtain economic profits in the long run because:

of barriers to entry

an industry comprising a small number of firms, each which considers the potential reactions of its rivals in making price output decisions is called

oligopoly

One major barrier to entry under pure monopoly arises from:

ownership of essential resources

refer to the accompanying diagram. the firm will shut down at any prices less than

p2

Refer to the demand and cost data for a pure monopolist given in the table. if the monopolist perfectly price-discriminated and sold each unit of the product at the maximum price the buyer of that init would be willing to pay, and if the monopolist sold 4 units, then total revenue would be

$900

assume six firms composing an industry have market shares of 30, 30, 10, 10, 10, 10 percent. the herfindahl index for this industry is

2,200

the table shows the total costs for a purely competitive firm. if the product sells for $1200 a unit, the firms profit maximizing output is

4

The accompanying table gives cost data for a firm that is selling in a purely competitive market. if product price is $75, the firm will produce

4 units of output

the total revenue of a purely competitive firm from selling 6 units of output is $48. based on this information, the unit price of the output must be

48/6= $8

the profit maximizing level of output will be

5 units

the accompanying table gives cost data for a firm that is selling in a purely competitive market. if the market place for the firms product is $32, the competitive firm should produce

8 units at an economic profit of $16

the four-firm concentration ratio for the industry described in this table is

80 percent

the data relate to a pure monopolist and the product it produces. what is the profit maximizing output and price for this monopolist

p= $14 and Q= 4

under which of the following situations would a monopolist increase profits by lowering price (and increasing output)

If it discovered that it was producing where MC<MR

In which market model would there be a unique product for which there are no close substitutes

Pure monopoly

the accompanying table gives cost data for a firm that is selling in a purely competitive market. if the market price for the firms product is $28, the competitive firm will

produce 7 units at a loss of $14

the table gives data for a purely competitive firm. when the firm produces 3 units of output, it makes an economic

profit of $3

If a firm has at least some control over the price of its product, then the firm cannot be in which market model:

pure competition

In which market model are the conditions of entry into the market easiest?

pure competition

in which market model are the conditions of entry most difficult

pure monopoly

which market model assumes the least number of firms in an industry

pure monopoly

Augis art shack sells art supplies in a perfectly competitive market. the firm is currently realizing economic profits of $25,000 in the short run. in the long run we would expect Augi's to

realize economic profits greater than 0 but less than $25,000

if a monopolists marginal revenue is $3.00 and its marginal cost is $4.50, it will increase its profits by

reducing output and raising price

long run competition equillibrium

results in zero economic profits

Which phrase would be most characteristic of pure monopoly?

sole seller

assume that the market for corn is purely competitive. currently, firms growing corn are suffering economic losses. in the long run, we can expect

some firms to exit, causing the market price of corn to rise

in pure competition, if the market price of the product is higher than the minimum average total cost of the firms, then

some firms will exit the industry and the industry supply will increase

supposed that total sales in an industry in a particular year are 600 million and sales by the top four sellers are 200 million, 150 million, 100 million, and 50 million, respectively. we can conclude that

the concentration ration is more than 80 percent

price discrimination refers to

the selling of a given product at different prices to different customers that do not reflect cost differences.

Answer the question based on the payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. if the two firms collude to maximize joint profits

there will be no incentive for either Firm A or Firm B to cheat

Ajax's advertising strategy question

with collusion and no cheating, the outcome of the game cell is A.

Refer to the profits-payoff table for a duopoly. if initially firm X's price was $6 and Y's price was $5

y would find it profitable to raise its price by $1, provided X would also raise its price by $1