BE 401, Chapter 8: Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets

question

You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 78 - 15Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. How much output should be produced in plant 1 in order to maximize profits?

answer

question

answer

$40.5

question

You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 78 - 15Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. What price should be charged in order to maximize revenues?

answer

$39

question

Which of the following is true under monopoly?

answer

P > MC.

question

You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. The profit-maximizing output for your firm is:

answer

question

You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. Your firm's maximum profits are:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C = 5 + 30Q. The profit-maximizing output for your firm is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C = 5 + 30Q. The profit-maximizing price is:

answer

130.

question

You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C = 5 + 30Q. Your firm's maximum profits are:

answer

495.

question

You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 120 - 6Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 2Q1 and MC2 = 4Q2. How much output should be produced in plant 1 in order to maximize profits?

answer

question

answer

question

You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 120 - 6Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 2Q1 and MC2 = 4Q2. What price should be charged in order to maximize revenues?

answer

question

In a competitive industry with identical firms, long-run equilibrium is characterized by:

answer

P = AC, P = MC, MR = MC.

D. All of the statements associated with this question are correct.

question

Which of the following is true?

answer

In the short run, a monopoly will shut down if P < AVC

question

You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's cost function is C = 60 + 4Q2. The profit-maximizing output for your firm is:

answer

question

You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's cost function is C = 60 + 4Q2. Your firm's maximum profits are:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The profit-maximizing output for your firm is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The profit-maximizing price is:

answer

45.

question

You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The revenue-maximizing output is:

answer

None of the answers is correct.

question

You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 50 + 3Q2. The profit-maximizing output for your firm is:

answer

10.

question

You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 50 + 3Q2. Your firm's maximum profits are:

answer

250.

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. The profit-maximizing output for your firm is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. The profit-maximizing price is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. Your firm's maximum profits are:

answer

170.

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. The revenue-maximizing output is:

answer

6.3.

question

Which of the following is true under monopoly?

answer

A. Profits are always positive.
B. P > minimum of ATC.
C. P = MR.
D. None of the answers is correct.

question

In the long run, monopolistically competitive firms:

answer

have excess capacity.

question

If a monopolistically competitive firm's marginal cost increases, then in order to maximize profits, the firm will:

answer

reduce output and increase price.

question

Which of the following market structures would you expect to yield the greatest product variety?

answer

Monopolistic competition

question

The primary difference between monopolistic competition and perfect competition is:

answer

A. the ease of entry and exit into the industry.
B. the number of firms in the market.
C. Both the ease of entry and exit into the industry and the number of firms in the market are correct.
D. None of the answers is correct.

question

Which of the following industries is best characterized as monopolistically competitive?

answer

Toothpaste

question

Which of the following is an example of monopoly?

answer

Local utility industry in a small town

question

Differentiated goods are a feature of a:

answer

monopolistically competitive market.

question

Firms have market power in:

answer

D. monopolistically competitive markets and monopolistic markets.

question

There is no market supply curve in:

answer

monopolistically competitive and monopolistic markets.

question

Suppose that initially the price is $50 in a perfectly competitive market. Firms are making zero economic profits. Then the market demand shrinks permanently, some firms leave the industry, and the industry returns to a long-run equilibrium. What will be the new equilibrium price, assuming cost conditions in the industry remain constant?

answer

$50

question

Which of the following statements concerning monopoly is NOT true?

answer

A monopoly is always undesirable

question

Which of the following features is common to both perfectly competitive markets and monopolistically competitive markets?

answer

There is free entry and long-run profits are zero.

question

The source(s) of monopoly power for a monopoly may be:

answer

economies of scale, economies of scope, patents.
D. All of the statements associated with this question are correct.

question

Economies of scale exist whenever:

answer

average total costs decline as output increases.

1 of 40

question

answer

question

answer

$40.5

question

You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 78 - 15Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. What price should be charged in order to maximize revenues?

answer

$39

question

Which of the following is true under monopoly?

answer

P > MC.

question

You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. The profit-maximizing output for your firm is:

answer

question

You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. Your firm's maximum profits are:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C = 5 + 30Q. The profit-maximizing output for your firm is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C = 5 + 30Q. The profit-maximizing price is:

answer

130.

question

You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C = 5 + 30Q. Your firm's maximum profits are:

answer

495.

question

answer

question

answer

question

You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 120 - 6Q, where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 2Q1 and MC2 = 4Q2. What price should be charged in order to maximize revenues?

answer

question

In a competitive industry with identical firms, long-run equilibrium is characterized by:

answer

P = AC, P = MC, MR = MC.

D. All of the statements associated with this question are correct.

question

Which of the following is true?

answer

In the short run, a monopoly will shut down if P < AVC

question

You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's cost function is C = 60 + 4Q2. The profit-maximizing output for your firm is:

answer

question

You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's cost function is C = 60 + 4Q2. Your firm's maximum profits are:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The profit-maximizing output for your firm is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The profit-maximizing price is:

answer

45.

question

You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The revenue-maximizing output is:

answer

None of the answers is correct.

question

You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 50 + 3Q2. The profit-maximizing output for your firm is:

answer

10.

question

You are the manager of a firm that sells its product in a competitive market at a price of $60. Your firm's cost function is C = 50 + 3Q2. Your firm's maximum profits are:

answer

250.

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. The profit-maximizing output for your firm is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. The profit-maximizing price is:

answer

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. Your firm's maximum profits are:

answer

170.

question

You are the manager of a monopoly that faces a demand curve described by P = 63 - 5Q. Your costs are C = 10 + 3Q. The revenue-maximizing output is:

answer

6.3.

question

Which of the following is true under monopoly?

answer

A. Profits are always positive.
B. P > minimum of ATC.
C. P = MR.
D. None of the answers is correct.

question

In the long run, monopolistically competitive firms:

answer

have excess capacity.

question

If a monopolistically competitive firm's marginal cost increases, then in order to maximize profits, the firm will:

answer

reduce output and increase price.

question

Which of the following market structures would you expect to yield the greatest product variety?

answer

Monopolistic competition

question

The primary difference between monopolistic competition and perfect competition is:

answer

question

Which of the following industries is best characterized as monopolistically competitive?

answer

Toothpaste

question

Which of the following is an example of monopoly?

answer

Local utility industry in a small town

question

Differentiated goods are a feature of a:

answer

monopolistically competitive market.

question

Firms have market power in:

answer

D. monopolistically competitive markets and monopolistic markets.

question

There is no market supply curve in:

answer

monopolistically competitive and monopolistic markets.

question

answer

$50

question

Which of the following statements concerning monopoly is NOT true?

answer

A monopoly is always undesirable

question

Which of the following features is common to both perfectly competitive markets and monopolistically competitive markets?

answer

There is free entry and long-run profits are zero.

question

The source(s) of monopoly power for a monopoly may be:

answer

economies of scale, economies of scope, patents.
D. All of the statements associated with this question are correct.

question

Economies of scale exist whenever:

answer

average total costs decline as output increases.

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