Intro to Micro
Suppose that a monopoly computer chip maker increases production from 10 microchips to 11 microchips. If the market price declines from $30 per unit to $29 per unit, marginal revenue for the eleventh unit is
19
A firm's long-run average total costs increase as it produces more output. This firm has:
Diseconomies of scale
In perfect competition, a change in fixed cost will
Encourage entry or exit in the long run such that price will change enough to leave firms earning zero profits
Which of these factors increases the likelihood of collusion among firms
Few firms in the industry
If you had an official license for the exclusive right to sell breakfast bagels in your community, your monopoly would result from
Government set barriers
In industries characterized by a few firms that dominate the market, product differentiation is MOST likely to occur when firms
Have tacit agreements to not engage in price war
Max profit
MR=MC
A customer with significant buying power in an industry would
Make a tacit price agreement more difficult to achieve
A monopolist's marginal cost curve shifts up, but the firm's demand curve remains the same and the firm does not shut down. Compared with the condition before the increase in marginal costs, the monopolist will _____ its price and _____ its level of production
Raise; decrease
Diminishing returns are a reason that:
The marginal cost curve is upward sloping
The MAIN reason a monopoly engages in price discrimination is
To increase profits
Perfectly competitive market
a market that meets the conditions of 1) many buyers and sellers, 2) all firms selling identical products, and 3) no barriers to new firms entering the market
The marginal cost curve intersects the average variable cost curve at
at its lowest point
You own a deli. Which input of production is most likely fixed at your deli?
dining room
A firm's ____ are costs that are incurred even if there is no output. In the short run, these costs ____ as production increases
fixed costs; do not change,
A firm that has lower costs per unit as it increases production in the long run has:
increasing returns to scale
An increase in the fixed costs of a monopoly firm would _____ price and _____ quantity in the short run.
not change; not change
A(n) ______ gives an inventor a temporary monopoly on the use or sale of an invention
patent