Econ 201 Questions 91-119
Refer to Table 17-9. If the marginal cost of production in this market is $4, what is the socially efficient quantity of output?
6 units
Refer to Figure 16-5. Panel a shows a profit-maximizing monopolistically competitive firm that is
earning zero economic profit.
Refer to Figure 16-3. This firm is operating
in the short run and earning a positive economic profit.
In a duopoly situation, the logic of self-interest results in a total output level that
exceeds the monopoly level of output, but falls short of the competitive level of output.
Each firm in a monopolistically competitive market
faces a downward-sloping demand curve.
In an oligopoly, the total output produced in the market is
higher than the total output that would be produced if the market were a monopoly but lower than the total output that would be produced if the market were perfectly competitive.
Refer to Figure 16-7. If a firm in a monopolistically competitive market was producing the level of output depicted as Qd in panel (d), it would
not be maximizing its profit.
Refer to Figure 16-3. At the profit-maximizing level of output, what is this firm's total cost of production?
$1,400
Refer to Figure 16-3. What price will the monopolistically competitive firm charge in this market?
$80
Crude oil is primarily supplied to the world market by a few Middle Eastern countries. Such a market is an example of a(n) (i) imperfectly competitive market. (ii) monopoly market. (iii) oligopoly market.
(i) and (iii) only
Refer to Figure 16-2. The firm's profit-maximizing level of output is
24 units.
Table 16-7A monopolistically competitive firm faces the following demand schedule for its product. In addition, the firm has total fixed costs equal to 20. Refer to Table 16-7. If the firm has a constant marginal cost of $7 per unit, how many units should the firm produce to maximize profit?
3 units
Which market structure would likely have the highest concentration ratio?
Monopoly
Which of the following might be an example of an economic argument against advertising?
People may be deluded into thinking that a good with a brand name is better than an otherwise identical generic brand
Assume a monopolistically competitive firm encounters a decrease in average variable cost at all output levels.We would expect:
The price to fall and output to rise
A particular cable TV company requires a household to subscribe to its high-speed Internet service if it subscribes to cable TV, and vice versa. This practice
a. is referred to as tying. b. is regarded by some economists as a form of price discrimination. c. is controversial among economists because they disagree on whether it has adverse effects for society as a whole. d. All of the above are correct. <----- Correct Asnwer
Refer to Table 16-3. What is the concentration ratio for Industry C?
approximately 48%
Figure 17-2. Two companies, Acme and Pinnacle, each decide whether to produce a good quality product or a poor quality product. In the figure, the dollar amounts are payoffs and they represent annual profits for the two companies. Refer to Figure 17-2. If this game is played only once, then the most likely outcome is that
both firms produce a good quality product.
A recent outbreak of hepatitis was linked to a national fast-food restaurant chain. This is an example of a case in which
brand name identity can be detrimental to the profitability of a firm.
Check My Work One key difference between an oligopoly market and a competitive market is that oligopolistic firms
can affect the profit of other firms in the market by the choices they make while firms in competitive markets do not affect each other by the choices they make.
A profit-maximizing firm operating in a monopolistically competitive market that is in a long-run equilibrium has
chosen a quantity of output where average revenue equals average total cost.
Critics of advertising argue that advertising
creates desires that otherwise might not exist.
The simplest type of oligopoly is
duopoly.
A downward-sloping demand curve
is a feature of all monopolistically competitive firms.
Refer to Figure 16-9. Given this firm's cost curves, if the firm were perfectly competitive rather than monopolistically competitive, then in a long-run equilibrium it would produce
more than 133.33 units of output.
Which of the following pairs illustrates the two extreme examples of market structures?
perfect competition and monopoly
If a market is a duopoly and additional firms enter and do not cooperate, then
price falls and quantity rises.
As a group, oligopolists earn the highest profit when they
produce a total quantity of output that falls short of the Nash-equilibrium total quantity.
Oligopolists may well be able to reach their preferred, cooperative outcome if
the game they play is repeated a sufficient number of times.
