In class quiz 11

monopoly is a market structure characterized by: a) a larger number of small firms b) single buyer and several sellers c) a product with many close substitutes d) barriers to entry and exit

d) barriers to entry and exit

If a perfectly competitive firm is producing a quantity that generate MR > MC, then profit a) is maximized b) can be increased by increasing the price c) can be increased by decreasing the price d) can be increased by increasing production

d) can be increased by increasing production

Suppose the automobile buyers in the southern part of a town have no idea what prices are being paid in the northern part of town. This situation violate the perfect competition assumption of a) no discrimination b) identical goods c) many buyers and sellers d) complete information

d) complete information

If all firms in a perfectly competitive industry earn zero economic profits, in the long run, the: a) number of firms in the industry will increase b) industry supply curve will shirt to the right c) industry supply curve will shift to the left d) number of firms in the industry will not change

d) number of firms in the industry will not change

In the short run, if P less than AVC, a perfectly competitive firm a) does not produce output ad incurs a negative economic firm b) produces output and incurs a negative economic profit c) produces output and earns an economic profit d) does not produce output and earns an economic profit

a) does not produce output ad incurs a negative economic firm

Suppose that some firms in a perfectly competitive industry are incurring negative economic profits. In the long run, the: a) industry supply curve will shift to the left b) number of firms in the industry will not change c) industry supply curve will not shift d) number of firms in the industry will increase

a) industry supply curve will shift to the left

the demand curve for a monopoly is: a) the industry demand curve b) horizontal because no one can enter it c) the sum of all the firm supply curves in the monopoly's industry d) perfectly elastic

a) the industry demand curve

Suppose that some firms in a perfectly competitive industry are earning positive economic profits. At this time, the: a) number of firms in the industry will decrease b) industry is not in long-run equilibrium c) industry supply curve is shifting to the left d) number of firms in the industry will change in the short run

b) industry is not in long-run equilibrium

In a perfectly competitive industry, economic profit a) will generally be positive in long run equilibrium b) is found by using cost in the economic sense (includes opportunity cost) c) is total revenue minus marginal cost d) will be negative if TC is greater than TR in long run equilibrium

b) is found by using cost in the economic sense (includes opportunity cost)

In the short run, if AVC less than P less than ATC, a perfectly competitive firm: a) does not produce output and earns zero economic profit b) produces output and incurs an economic loss c) produces output and earns an economic profit d) does not produce output and earns an economic profit

b) produces output and incurs an economic loss

if a perfectly competitive firm sells 300 units of output at a market price of $1 per unit, its marginal revenue is: a) $300 b) $1 c) Less than $1 d) more than $1 but less than $300

c) Less than $1

a perfectly competitive firm will continue producing in the short run as long as it can cover its a) total cost b) average total cost c) average variable cost d) average fixed cost

c) average variable cost

Marginal revenue for a monopolist is: a) equal to average revenue b) equal to price c) less than price greater than price

c) less than price

if your farm has the only known sure of a rare cocoa bean needed to make chocolate covered peanut, your monopoly would result from: a) sun cost b) location c) ownership of inputs d) government restrictions

c) ownership of inputs

a perfectly competitive firm's marginal cost curve above the the average variable cost curve is its: a) input demand curve b) total revenue curve c) short run supply curve d) marginal revenue curve

c) short run supply curve