Final for MicroEconomics Colander 9e (Exam 3)

Q: D for newly released novels are less price-elastic than the D for older novels; which pricing strategy would a price-discriminating publishing firm follow

charge a higher price for the older novels

question

Barriers to entry

answer

restrict the number of firms in an industry

question

Each firm in Perf. Comp.

answer

sets the Q based on the market $

question

In Perf. Comp. markert, firms set

answer

quantities but not prices $

question

In Perf. Comp. market, the D-curve faced by an IND. FIRM is

answer

perfectly elastic

question

Market D-curve for a product produced in Perf. Comp. industry is normally

answer

downward-sloping

question

If MR of the next (add.) widget a firm produces is $50; its MC is $35, a firm should

answer

increase production

question

An increase in the # of firms in a perf. comp. market causes

answer

a increase in the market supply curve

question

Perf. comp. firm in the long run earns

answer

positive normal profits and zero economic profits

question

During recession, the $ of restaurant meals falls over by 10 percent; most likely cause of

answer

shift in the D-curve to the left

question

Long-run market supply is downward-sloping line in a

answer

decreasing-cost industry

question

Monopoly is a market structure in which

answer

one firm makes up the entire market

question

Monopoly firm is different from a competitive firm in that

answer

a monopolist can influence the market price whereas a competitive firm cannot

question

A sig. difference between Monopoly and Perf. Comp. is that

answer

monopolist's D-curve is the industry demand curve, whereas the comp. firm's D-curve is perf. elastic

question

If a monopolist produces beyond the quantity where MC = MR

answer

the increase in revenue is less than the increase in cost

question

If MR>MC, a monopolist should

answer

increase production

question

If MR<MC, a monopolist should

answer

decrease production

question

D for newly released novels are less price-elastic than the D for older novels; which pricing strategy would a price-discriminating publishing firm follow

answer

charge a higher price for the older novels

question

Natural Monopoly

answer

occurs when a single firm can supply the entire market demand for a product at a lower T.C. than would be possible if two or more firms supplied the market

question

Why are patents important

answer

patents act as a barrier to entry, allowing monopoly profits

question

Monopolistic-ally comp. industry has

answer

many firms producing diff. products

question

Under monopolistic comp., there are

answer

few barriers to entry

question

Because monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as

answer

the MB of advertising exceeds the MC of it

question

Fast-food industry is monopolistic-ally comp., a profit-maximizing firm in this industry sells its product at a price

answer

that maximizes the diff between MR and MC

question

Monopolistic-ally comp. firm is earning economic profits in the short run

answer

these profits will be eliminated in the long run as new firms enter the industry

question

If a monopolistic-ally comp. market became perf. comp.; output probably would

answer

rise

question

Strategic decision making is most likely to occur in which market structure

answer

oligopoly

question

Under Oligopoly

answer

there are only a few sellers in the industry

question

Central characteristic of Oligopolistic industries is

answer

interdependent pricing decisions

question

Oligopoly is characterized by

answer

few sellers

question

Several firms are operating in a market where they take the other firms' response to their actions into account. This market is:

answer

oligopolistic market

question

Real-world market structures tend to be

answer

monopolistic-ally comp. and oligopolistic

question

The general monitoring problem implies that

answer

there is a cost to supervising employees so that they work toward the owner's goals rather than their own

question

Monitoring problem will most likely occur when

answer

employees' self-interest differs from the firms self-interest

question

Opening an industry to international comp tends to

answer

force lazy monopolists to increase efficiency

1 of 34

question

Barriers to entry

answer

restrict the number of firms in an industry

question

Each firm in Perf. Comp.

answer

sets the Q based on the market $

question

In Perf. Comp. markert, firms set

answer

quantities but not prices $

question

In Perf. Comp. market, the D-curve faced by an IND. FIRM is

answer

perfectly elastic

question

Market D-curve for a product produced in Perf. Comp. industry is normally

answer

downward-sloping

question

If MR of the next (add.) widget a firm produces is $50; its MC is $35, a firm should

answer

increase production

question

An increase in the # of firms in a perf. comp. market causes

answer

a increase in the market supply curve

question

Perf. comp. firm in the long run earns

answer

positive normal profits and zero economic profits

question

During recession, the $ of restaurant meals falls over by 10 percent; most likely cause of

answer

shift in the D-curve to the left

question

Long-run market supply is downward-sloping line in a

answer

decreasing-cost industry

question

Monopoly is a market structure in which

answer

one firm makes up the entire market

question

Monopoly firm is different from a competitive firm in that

answer

a monopolist can influence the market price whereas a competitive firm cannot

question

A sig. difference between Monopoly and Perf. Comp. is that

answer

monopolist's D-curve is the industry demand curve, whereas the comp. firm's D-curve is perf. elastic

question

If a monopolist produces beyond the quantity where MC = MR

answer

the increase in revenue is less than the increase in cost

question

If MR>MC, a monopolist should

answer

increase production

question

If MR<MC, a monopolist should

answer

decrease production

question

D for newly released novels are less price-elastic than the D for older novels; which pricing strategy would a price-discriminating publishing firm follow

answer

charge a higher price for the older novels

question

Natural Monopoly

answer

occurs when a single firm can supply the entire market demand for a product at a lower T.C. than would be possible if two or more firms supplied the market

question

Why are patents important

answer

patents act as a barrier to entry, allowing monopoly profits

question

Monopolistic-ally comp. industry has

answer

many firms producing diff. products

question

Under monopolistic comp., there are

answer

few barriers to entry

question

Because monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as

answer

the MB of advertising exceeds the MC of it

question

Fast-food industry is monopolistic-ally comp., a profit-maximizing firm in this industry sells its product at a price

answer

that maximizes the diff between MR and MC

question

Monopolistic-ally comp. firm is earning economic profits in the short run

answer

these profits will be eliminated in the long run as new firms enter the industry

question

If a monopolistic-ally comp. market became perf. comp.; output probably would

answer

rise

question

Strategic decision making is most likely to occur in which market structure

answer

oligopoly

question

Under Oligopoly

answer

there are only a few sellers in the industry

question

Central characteristic of Oligopolistic industries is

answer

interdependent pricing decisions

question

Oligopoly is characterized by

answer

few sellers

question

Several firms are operating in a market where they take the other firms' response to their actions into account. This market is:

answer

oligopolistic market

question

Real-world market structures tend to be

answer

monopolistic-ally comp. and oligopolistic

question

The general monitoring problem implies that

answer

there is a cost to supervising employees so that they work toward the owner's goals rather than their own

question

Monitoring problem will most likely occur when

answer

employees' self-interest differs from the firms self-interest

question

Opening an industry to international comp tends to

answer

force lazy monopolists to increase efficiency

Order an Essay Now & Get These Features For Free:

Place an Order