ECON 3

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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


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