Micro ch 15-18 (test questions)

A single-price monopoly can sell 10 units of its product at a price of $45 each but to sell 11 units, the monopoly must cut the price to $44. What is the marginal revenue of the extra unit sold?

$34

In the short run, a perfectly competitive firm can experience which of the following?

An economic profit An economic loss but it continues to stay open An economic loss equal to its total fixed cost when it shuts down

If a firm shuts down, it

incurs an economic loss equal to its total fixed cost.

In a perfect competition, marginal revenue

is equal to the market price.

Each firm in a perfectly competitive industry

produces a good that is identical to that of the other firms

Consider a perfectly competitive market experiencing good times. In the short run, the equilibrium price will ______ and firms will earn an ______

Increase; economic profit as the new price exceeds average total cost

Which of the following is only in oligopoly

One firm's actions affect another firm's profit

Which of the following is always a violation of the antitrust laws?

Price fixing

Product discrimination allows a firm to compete with another firm on the basis of

Quality, price and marketing

If firms in monopolistic competition are earning economic profits, eventually

new firms enter the industry

When economies of scale exist so that one firm can meet the entire market demand at a lower average total cost than 2 or more firms,

A natural monopoly develops

A firm in monopolistic competition ______ influence its price and _____ influence the market average price

Can; cannot

New balance is a firm in monopolistic competition. If new balance is making an economic profit from their new cross-training shoe, over time the demand for these shoes

Decrease as new firms enter the market

Game theory is the tool that economists use to analyze strategic behavior, which is behavior that takes account the _______ behavior of others and the mutual recognition of _______

Expected; interdependence

To max profit, a monopolistic competitive firm produces so that ______ and an oligopoly firm produces so that ________

MR=MC; MR=MC

The focus of antitrust legislation is to

Maintain competition

Which market has the fewest number of firms?

Monopoly

When economies of scale limit the number of firms in an industry to 3, there is a

Natural oligopoly

A natural barrier to entry is defined as a barrier that arises because of

Technology that allows one firm to meet the entire market demand at lower average total cost than could 2 or more firms

Consider a perfectly competitive market that was in a long-run equilibrium when a permanent increase in demand occurs. Which of the following will occur as a result?

The existing firms will start to earn an economic profit New firms will be motivated to enter the market

In 2016, a federal judge prohibited Staples and Office Depot from merging because

The resulting HHI would have been too high

With perfect price discrimination, a monopoly can extract the ________ price each customer is willing to pay and thereby obtain the entire ________ surplus.

maximum; consumer

In contrast to competitive firms, single-price monopolies

can make an economic profit indefinitely.

A group of firms acting together to limit​ output, raise​ price, and increase economic profit is a called a

cartel

What does monopolistic competition have in common with monopoly?

downward sloping demand curve

when a city licenses only 3 taxi firms to serve the market the city has created a

legal oligopoly

The marginal revenue curve facing a monopolistically competitive firm

lies below its demand curve

For a duopoly, the maximum total profit is reached when the duopoly produces

the same amount of output as the monopoly outcome.

price discrimination is possible, in part, because

the willingness to pay can vary among groups of buyers