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quantity of inputs and quantity of output
answer
For a firm, the production function represents the relationship between
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economies of scale
answer
If long-run average total cost decreases as the quantity of output increases, the firm is experiencing
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price is less than average variable cost
answer
A profit maximizing firm will shut down in the short run when
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B)
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a firm that is a natural monopoly:
a) would experience a lower ATC if more firms entered the market
b) is not likely to be concerned about new entrants eroding its monopoly power
c)is taking advantage of diseconomies of scale
a) would experience a lower ATC if more firms entered the market
b) is not likely to be concerned about new entrants eroding its monopoly power
c)is taking advantage of diseconomies of scale
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Monopolistically competitive industry
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many firms, differentiated products, and free entry
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short run, but not long run
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A firm operating in a monopolistically competitive market can earn economic profits in
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maximize profit and produce a socially optimal level of output
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A perfectly price-discriminating monopolist is able to
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A monopolist produces
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less than the socially efficient quantity of output but at a higher price than in a competitive market
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TC
answer
FC+VC=
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Economic Profit
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Total Revenue-Total Costs (both explicit and implicit costs)
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Accounting Profit
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total revenue-total explicit cost
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AFC+AVC
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ATC=
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change in output
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marginal product=
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can choose the quantity of butter it produces, but not price
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Land of many lakes sells butter to a broker in Albert Lea, Minnesota. Because the market for butter is generally considered to be competitive, LML
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municipal water and sewer
answer
Which of the following industries is least likely to exhibit the characteristics of free entry?
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rise in the short run. some firms will enter industry. price will then fall to reach new long run equilibrium.
answer
a competitive market is in long-run equilibrium. If demand increases, we can be certain that price will
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increase
answer
suppose that firms in a competitive industry are earning positive economic profits. all else equal, in the long run, we would expect the number of firms in the industry to
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i)product priced higher than it would be without the exclusive rights
ii) incentives for pharmaceutical companies to invest in research and development
ii) incentives for pharmaceutical companies to invest in research and development
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Granting a pharmaceutical company a patent for a new medicine will lead to
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John Jr. owns the best seafood restaurant in a popular resort area. He charges high prices because the quality of the food is so good.
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Which of the following is not an example of a barrier to entry?
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70
answer
Muffinhaus
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change in tc/change in q
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marginal cost equation
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change in total revenue/change in quantity
answer
marginal revenue equation
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G
answer
Which area represents the deadweight loss from monopoly?
question
$25,000
answer
Heavy metal band
1,000 willing to pay $150
5000 willing to pay 50
1500 seats available
cost of concert=50,000
additional profit to adding a flat price of $150 per ticket?
1,000 willing to pay $150
5000 willing to pay 50
1500 seats available
cost of concert=50,000
additional profit to adding a flat price of $150 per ticket?
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natural gas company charging higher rate in winter than summer
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Which of the following i snot an example of price discrimination by a firm?
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More firms will enter this market and each firm will have a smaller share of the total market demand, shifting this firm's demand curve to the left.
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figure 16-11. The graph depicts a monopolistically competitive firm in the short run. Which of the following explanations best describes the long run adjustment?
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$35
answer
Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that the average total cost when 5 units of output are produced is $30, and the marginal cost of the sixth unit of output is $60. What is the average total cost when six units are produced?
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marginal product decreases
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figure 13-1. As the number of workers increases,
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The price of Bob's bison burgers will exceed Bob's marginal cost.
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Bob's Butcher Shop is the only place within 100 miles that sells bison burgers. Assuming that Bob is a monopolist and maximizing profit, which of the following statements is true?
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$15
answer
Refer to Figure 14-2. If the market price is $10, what is the firm's short-run economic profit?
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(i), (ii), and (iii)
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Suppose that a firm operating in perfectly competitive market sells 300 units of output at a price of $3 each. Which of the following statements is correct? (i) Marginal revenue equals $3. (ii) Average revenue equals $3. (iii) Total revenue equals $900.
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diminishing marginal product.
answer
If Farmer Green plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 5 bushels of wheat. If he plants 2 bags, he gets 9 bushels. If he plants 3 bags, he gets 12 bushels. A bag of seeds costs $120, and seeds are his only cost. Farmer Green's production function exhibits
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