Microeconomics Chapters 8-10 - Assignment Essays

question

Which of the following is not necessarily a characteristic of perfect competition:

answer

low prices

question

Firms in a perfect competition have no control over:

answer

What price to charge

question

Firms in a perfect competition are price takers because:

answer

Each firm is small and goods are perfect substitutes for one another

question

The price charged by a perfectly competitive firm is determined by:

answer

Market demands and market supply

question

Suppose the equilibrium price in a perfectly competitive industry is $10 and a firm in the industry charges $9. Which of the following will happen?

answer

The firm will make less profit than it could at the $10 price.

question

The total revenue curve for a perfectly competitive firm:

answer

Has a constant slope as output increases.

question

Consider exhibit 0123. If the market price is $8.50, what is the profit maximizing output and profit?

answer

Output = 40; Profit = $35

question

Perfectly competitive firms that earn an economic profit in the short run choose the output that:

answer

Maximizes the difference between total revenue and total cost.

question

Marginal revenue is:

answer

the change in total revenue divided by the change in output.

question

Average revenue for a perfectly competitive firm is equal to:

answer

Marginal revenue

question

If Harry's Blueberries, a perfectly competitive firm, shuts down in the short run, Harry must pay:

answer

Only fixed costs.

question

A monopolist is:

answer

A single seller of a product with no close substitutes.

question

In the market structure of monopoly, new firms:

answer

cannot profitable enter the industry, even in the long run.

question

Which of the following describes the market structure of monopoly:

answer

A single firm producing all of the output for the industry.

question

In exhibit 0138, the marginal revenue of the sixth unit is:

answer

$-40

question

Which of the following is not true of monopolies:

answer

Monopolist can charge any price they want to make a profit.

question

One likely result of monopoly power is:

answer

A higher price than would exist in the competitive industry

question

A profit-maximizing monopolist that produces in the short run will:

answer

increase output as long as the marginal revenue exceeds the cost of producing that product

question

Gilligan runs the only dry-cleaning business on a desert isle. If the cost of cleaning fluid falls, he can increase profit by:

answer

Lowering price

question

For a monopolist, there is no supply curve because:

answer

There is no unique relationship between price and quantity supplied.

question

Which of the following would not bar entry into a market:

answer

The necessity of taking risks when starting a firm.

question

The term monopolistic competition

answer

denotes an industry with many sellers of differentiated products.

question

A monopolistically competitive firm can raise price somewhat due to:

answer

product differentiation

question

When firms differentiate their products they:

answer

Frequently create artificial or superficial differences among products, thus raising production costs

question

Monopolistic competitors areL

answer

price searchers

question

A monopolistic competitor's demand curve is:

answer

more elastic that a monopolist's or oligopolist's but less than a perfect competitor's

question

Because of easy entry, monopolistically competitive firms will:

answer

Earn no economic profit in the long run

question

Which of the following characteristics does perfect competition share with monopolistic competition?

answer

Zero long-run economic profit

question

Oligopolist industries consist of:

answer

A few interdependent firms

question

Interdependent decision making on price, quality, or advertising is characteristic of:

answer

Oligopolies

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question

Which of the following is not necessarily a characteristic of perfect competition:

answer

low prices

question

Firms in a perfect competition have no control over:

answer

What price to charge

question

Firms in a perfect competition are price takers because:

answer

Each firm is small and goods are perfect substitutes for one another

question

The price charged by a perfectly competitive firm is determined by:

answer

Market demands and market supply

question

Suppose the equilibrium price in a perfectly competitive industry is $10 and a firm in the industry charges $9. Which of the following will happen?

answer

The firm will make less profit than it could at the $10 price.

question

The total revenue curve for a perfectly competitive firm:

answer

Has a constant slope as output increases.

question

Consider exhibit 0123. If the market price is $8.50, what is the profit maximizing output and profit?

answer

Output = 40; Profit = $35

question

Perfectly competitive firms that earn an economic profit in the short run choose the output that:

answer

Maximizes the difference between total revenue and total cost.

question

Marginal revenue is:

answer

the change in total revenue divided by the change in output.

question

Average revenue for a perfectly competitive firm is equal to:

answer

Marginal revenue

question

If Harry's Blueberries, a perfectly competitive firm, shuts down in the short run, Harry must pay:

answer

Only fixed costs.

question

A monopolist is:

answer

A single seller of a product with no close substitutes.

question

In the market structure of monopoly, new firms:

answer

cannot profitable enter the industry, even in the long run.

question

Which of the following describes the market structure of monopoly:

answer

A single firm producing all of the output for the industry.

question

In exhibit 0138, the marginal revenue of the sixth unit is:

answer

$-40

question

Which of the following is not true of monopolies:

answer

Monopolist can charge any price they want to make a profit.

question

One likely result of monopoly power is:

answer

A higher price than would exist in the competitive industry

question

A profit-maximizing monopolist that produces in the short run will:

answer

increase output as long as the marginal revenue exceeds the cost of producing that product

question

Gilligan runs the only dry-cleaning business on a desert isle. If the cost of cleaning fluid falls, he can increase profit by:

answer

Lowering price

question

For a monopolist, there is no supply curve because:

answer

There is no unique relationship between price and quantity supplied.

question

Which of the following would not bar entry into a market:

answer

The necessity of taking risks when starting a firm.

question

The term monopolistic competition

answer

denotes an industry with many sellers of differentiated products.

question

A monopolistically competitive firm can raise price somewhat due to:

answer

product differentiation

question

When firms differentiate their products they:

answer

Frequently create artificial or superficial differences among products, thus raising production costs

question

Monopolistic competitors areL

answer

price searchers

question

A monopolistic competitor's demand curve is:

answer

more elastic that a monopolist's or oligopolist's but less than a perfect competitor's

question

Because of easy entry, monopolistically competitive firms will:

answer

Earn no economic profit in the long run

question

Which of the following characteristics does perfect competition share with monopolistic competition?

answer

Zero long-run economic profit

question

Oligopolist industries consist of:

answer

A few interdependent firms

question

Interdependent decision making on price, quality, or advertising is characteristic of:

answer

Oligopolies

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