ECON 3
refer to the above data for a non-discriminating monopolist. at its profit maximizing output, this firm's total costs will be
$198
refer to the above data at its profit-maximizing output, this firm's total revenue will be
$280
suppose that a pure monoplist can sell 10 units of output at $5 per unit at 11 units at $4.90 per unit. the marginal revenue of the eleventh unit is
$3.90
refer to the above data for a non-discriminating monopolist. at its profit-maximizing output, this firm's total profit will be
$82
the herfindahl index for a pure monopolist is
10,000
refer to the above data for a non-discriminating monopolist. this firm will maximize its profit by producing
4 units
which of the following is correct?
A purely competitive firm is a "price taker," while a monopolist is a "price maker."
A purely monopolistic industry:
Has a downward-sloping demand curve.
which of the following statements is correct
In seeking the profit-maximizing output, the pure monopolist underallocates resources to its production.
Oligopolistic industries are characterized by:
a few dominant firms and substantial entry barriers.
Confronted with the same unit cost data, a monopolistic producer will charge:
a higher price and produce a small output than a competitive firm
A pure monopolist:
a one-firm industry
pure monopoly means
a single firm producing a product for which there are no close substitutes.
the mutual interdependence that characterizes oligopoly arises because
a small number of firms produce a large proportion of industry output
in the long run, a profit-maximizing monopolistically competitive firm sets it price
above marginal cost
in the short-run, a profit-maximizing monopolistcally competitive firm sets it price
above marginal cost
Nonprice competition refers to:
advertising, product promotion, and changes in the real or perceived characteristics of a product.
OPEC provides an example of:
an international cartel
the mr=mc rule
applies both to pure monopoly and pure competition.
barriers to entering an industry
are the basis for monopoly
if a regulatory commission wants to establish a socially optimal price for a natural monopoly, its should select a price
at which the marginal cost curve intersects the demand curve
if a regulatory commision wants to provide a natural monopoly with a fair return, it should establish a price that is equal to
average total cost
monopolistic competition resembles pure competition because
barriers to entry are either weak or nonexistent
purely competitive firms and pure monopolists are similar in that
both maximize profit where mr=mc
the monopolistically competitive firm shown in the above figure
cannot operate profitably, at least in the short run
Secret conspiracies to fix prices are examples of:
covert collusion
Suppose an oligopolistic producer assumes its rivals will ignore a price increase but match a price cut. In this case the firm perceives its:
demand curve as kinked, being steeper below the going price than above
the supply curve of a pure monopolist
does not exist because prices are not given to a monoplist
in the long run,economic theory predicts that monopolistically competitive firm will
have excess production capacity
the copper, aluminum, cement, and industrial alcohol industries are examples of
homogeneous oligopoly
the pure monopolist's demand curve is
identical with the industry demand curve
prices are likely to be least flexible
in oligopoly
the non-discriminating pure monopolist's demand curve
is the industry demand curve
the monopolistically competitive seller's demand curve will become more elastic the
larger the number of competitors
a non-discriminating pure monopolist's demand curve
lies above its marginal revenue curve
a natural monopoly occurs when
long-run average costs decline continuously through the range of demand.
monopolistic competition
many firms producing similar but differentiated products
in the long run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to
marginal revenue
the above diagram implies that whenever a firm's demand curve is downsloping
marginal revenue is less than price
to maximize profit a pure monopolist must
maximize the difference between total revenue and total cost.
in the short run a monopolistically competitive firm's economic profit
may be positive, zero or negative
When a monopolistically competitive firm is in long-run equilibrium:
mr=mc and p> minimum atc
which of the following is a unique feature of oligopoly
mutual interdependence
we would expect a cartel to achieve
neither allocative efficiency nor productive efficiency
at its profit-maximizing output, a pure non-discriminating monopolist achieves
neither productive efficiency nor allocative efficiency
the supply curve for a monopolist is
nonexistent
pure monopolists may obtain economic profits in the long run because
of barriers to entry
economic analysis of a monopolistically competitive industry is more complicated than that of pure competition because
of product differentiation and consequent product promotion activities
the conclusion that oligopoly is inefficient relative to the competitive ideal must be qualified because
over time oligopolistic industries may promote more rapid product development and greater improvement of production techniques than if they were purely competitive
which of the following is correct for a monopolistically competitive firm in long-run equilibrium
p exceeds minimum atc
because the monopolist's demand curve is downsloping
price must be lowered to sell more output
in a oligopolistic market
products may be standardized or differentiated
which of the following is not a basic characteristc of monopolistic compettion
recognized mutual interdependence
Use your basic knowledge and your understanding of market structures to answer this question. Which of the following companies most closely approximates a monopolistic competitor?
subway sandwiches
If the four-firm concentration ratio for industry X is 80:
the four of the largest firms account for 80 percent of total sales
If you sum the squares of the market shares of each firm in an industry (as measured by percent of industry sales), you are calculating the:
the herfindahl index
Oligopoly is difficult to analyze primarily because:
the price and output decisions of any one firm depend on the reactions of its rivals
the dilemma of regualtion refers to teh idea that
the regulated price which achieves allocative efficiency is also likely to result in losses
which of the following is an illustration of differentiated oligopoly
the soft drink industry
What do economies of scale, the ownership of essential raw materials, and patents have in common?
they are all barriers to entry
