Microeconomics Assignment #4 - ECU

Refer to the diagram for a pure monopolist. If a regulatory commission seeks to achieve the socially optimal allocation of resources to this line of production, it will set a price of:

P2

Refer to the diagram. The firm will realize an economic profit if price is:

P4

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for the firm's product is $28, the competitive firm will:

produce 7 units at a loss of $14.00.

If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:

will also be $5.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for the firm's product is $12, the competitive firm should produce:

zero units at a loss of $100.

The following table applies to a purely competitive industry composed of 100 identical firms. Refer to the table. The equilibrium price in this purely competitive market is:

$3.

Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm's price will exceed its marginal cost by ____ and its average total cost by ____.

$30; $20.50

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. At 3 units of output, total variable cost is ____ and total cost is ____.

$60; $210

The diagram indicates that the marginal revenue of the sixth unit of output is:

-$1.

Refer to the diagram. At the profit-maximizing output, total revenue will be:

0AHE

Refer to the diagram. At the profit-maximizing output, total variable cost is equal to:

0CFE

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for this firm's product is $68.10, it will produce:

Refer to the data. If the market price for this firm's product is $68.10, it will produce:

(Consider This) Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. Which of the following conditions of price discrimination explains why this occurs?

The items can be bought by people in the low-price group and transferred to members of the high-price group.

Refer to the diagram. Demand is relatively inelastic:

at any price below P2.

Refer to the diagram. At P1, this firm will produce:

47 units and realize an economic profit.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for this firm's product is $35, it will produce:

6 units at a loss of $90.

Which of the diagrams correctly portrays a nondiscriminating pure monopolist's demand (D) and marginal revenue (MR) curves?

B

Which of the following statements applies to a purely competitive producer?

It will not advertise its product.

Refer to the diagram. The firm's supply curve is the segment of the:

MC curve above its intersection with the AVC curve.

Refer to the diagram. At the profit-maximizing level of output, the firm will realize:

an economic profit of ABHJ.

The MR = MC rule:

applies both to pure monopoly and pure competition.

Barriers to entering an industry:

are the basis for monopoly.

The demand curve in a purely competitive industry is ______, while the demand curve to a single firm in that industry is ______.

downsloping; perfectly elastic

The MR = MC rule can be restated for a purely competitive seller as P = MC because:

each additional unit of output adds exactly its price to total revenue.

Refer to the diagram for a purely competitive producer. If product price is P3:

economic profits will be zero.

Refer to the diagram. At the profit-maximizing output, total profit is:

efbc

Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm will be operating in the:

elastic portion of its demand curve

Refer to the diagram for a pure monopolist. Monopoly output will be:

f

Refer to the diagrams. The price will be _______ and the quantity will be _______ with the industry structure represented by diagram (B) compared to the one represented in (A).

higher; lower

Assume a pure monopolist is charging price P and selling output Q as shown on the diagram. On the basis of this information, we can say that:

if marginal costs were somehow zero, the firm would be maximizing its profits.

Refer to the diagram. If price is reduced from P1 to P2, total revenue will:

increase by C - A.

If the firm in the diagram lowers price from P1 to P2, it will:

lose P1P2ba in revenue from the price cut but increase revenue by Q1bcQ2 from the increase in sales

A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating:

marginal revenue and marginal cost.

Refer to the diagram for a purely competitive producer. The firm will produce at a loss at all prices:

between P2 and P3

Refer to the diagram for a pure monopolist. Monopoly price will be:

c

If a purely competitive firm is producing at the P = MC output and realizing an economic profit, at that output:

marginal revenue exceeds ATC.

Refer to the diagram. The quantitative difference between areas Q1bcQ2 and P1P2ba in the diagram measures:

marginal revenue.

Refer to the diagram for a natural monopolist. If a regulatory commission were to set a maximum price of P3, the monopolist would:

maximize profits.

The supply curve for a monopolist is:

nonexistent.

Price discrimination is:

only illegal if used to lessen or eliminate competition.

Economic profit in the long run is:

possible for a pure monopoly but not for a pure competitor.

If a firm is confronted with economic losses in the short run, it will decide whether or not to produce by comparing:

price and minimum average variable cost.

Refer to the diagram. At P3, this firm will:

produce 40 units and incur a loss.

Refer to the diagram. At P2, this firm will:

produce 44 units and earn only a normal profit

Answer the question on the basis of the following cost data for a purely competitive seller. Refer to the data. If product price is $60, the firm will:

produce 6 units and realize a $100 economic profit.

Answer the question on the basis of the following cost data for a purely competitive seller. Refer to the data. If product price is $25, the firm will:

shut down and incur a $50 loss.

Refer to the diagram. At P4, this firm will:

shut down in the short run.

If at the MC = MR output, AVC exceeds price:

some firms should shut down in the short run.

Refer to the diagram for a purely competitive producer. The firm's short-run supply curve is:

the bcd segment and above on the MC curve

A firm reaches a break-even point (normal profit position) where:

total revenue and total cost are equal.

A purely competitive firm should produce in the short run if its total revenue is sufficient to cover its:

total variable costs

For a pure monopolist, marginal revenue is less than price because:

when a monopolist lowers price to sell more output, the lower price applies to all units sold.

Refer to the long-run cost curve for a firm. If the firm produces output Q1 at an average total cost of ATC1, then the firm is:

incurring X-inefficiency and is failing to realize all existing economies of scale.

Answer the question on the basis of the following information for a pure monopolist. The given nondiscriminating monopolist should set its price at:

$200.

For a purely competitive firm, total revenue:

has all of these characteristics (is price times quantity sold, increases by a constant absolute amount as output expands, graphs as a straight up sloping line from the origin)

Firms seek to maximize:

total profit

Answer the question on the basis of the following demand and cost data for a pure monopolist. Refer to the data. The profit-maximizing price for the monopolist will be:

$4.50

Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm's total profit will be:

$82.

Refer to the diagrams. With the industry structures represented by diagram:

(C) output will be less than in diagram (A).

For a purely competitive seller, price equals:

All of these. (Average revenue, Marginal revenue, Total revenue divided by output)

Refer to the diagram for a natural monopolist. If a regulatory commission set a maximum price of P1, the monopolist would produce output:

Q4 and realize a loss.

Refer to the diagram for a non-discriminating monopolist. Demand is elastic:

for all levels of output less than q2

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. We can infer that, at zero output, this firm's total fixed, total variable, and total costs are:

$150, zero, and $150, respectively.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market.Refer to the data. At 6 units of output, total fixed cost is ____ and total cost is ____.

$150; $300

Answer the question on the basis of the demand schedule shown below. Refer to the data. The marginal revenue obtained from selling the third unit of output is:

$2.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for the firm's product is $32, the competitive firm will produce:

8 units at an economic profit of $16.

Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Refer to the data. If the market price for this firm's product is $87, it will produce:

9 units at an economic profit of $281.97.

Which of the following industries most closely approximates pure competition?

Agriculture.

Which of the following is not a basic characteristic of pure competition?

Considerable nonprice competition.

Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, it should charge prices of:

P1 to children and P2 to adults

Refer to the diagram. The firm will shut down at any price less than:

P1.

Refer to the diagram for a purely competitive producer. The lowest price at which the firm should produce (as opposed to shutting down) is:

P2

An industry comprised of a very large number of sellers producing a standardized product is known as:

pure competition.