question
A single price monopolist is currently producing in the inelastic portion of its demand curve. In order to maximize profits, the monopolist should change price and output in which of the following ways?
answer
increase price, decrease output
question
game theory is most commonly used for analyzing the pricing behaviors of firms in which market structure?
answer
oligopoly
question
the profit maximizing combination of output and price for a single-price monopoly is?
answer
Q1 and P4
question
a firm with market power engages in price discrimination to
answer
to increase profits
question
which of the following is most likely to occur if a single-price monopolist is replaced by a perfectly competitive market?
answer
the deadweight loss will decrease
question
which of the following is true for both a monopolist competitive firm and a perfectly competitive firm in the long run equilibrium?
answer
profit = 0
question
all of the following characterize both perfectly competitive and monopolistically competitive markets except
answer
firms can affect the selling price of their product
question
which of the following is true of a monopolistically competitive firm in the long-run equilibrium?
answer
price exceeds marginal cost and the firm earns zero economic profit
question
if the monopolist can engage in perfect price discrimination the monopolists total output and the price for the last unit of output would be
answer
Q2 and P3
question
a monopolistically competitive firm is currently producing the profit maximization level of output. if the price of a variable input increases which of the following will occur?
answer
the firms ATC and MC cost curves will shit upward
question
which of the following is true of a monopolistically competitive firm in long-run equilibrium?
answer
the firm produces an output that minimizes atc
question
given the information in the payoff matrix it can be concluded that
answer
both firms will choose the low price strategy
question
if a monopolist is unregulated, its profit maximizing price and output level would lead to deadweight loss equal to area
answer
RTV
question
if the government regulates the monopolist to set price equal to atc, it will establish the price at
answer
P2
question
compared to a perfectly competitive industry with the same demand and cost curves, a monopolys price and output will be which of the following
answer
price Higher output Lower
question
in order for a firm to engage in price discrimination it must be
answer
able to separate consumers into different groups based on demand elasticities
question
which of the following market structures results in allocative efficiency?
answer
perfect competition
question
which of the following is true of a monopolistically competitive firm in long run equilibrium?
answer
price equals atc but is is greater than marginal cost
question
a monopolist introduces a technological innovation that lowers the marginal cost and average cost of production. the price of the good and the level of output are more likely to change in which of the following ways?
answer
price decrease
level of output increase
level of output increase
question
if lock chooses to charge the low price, the best course of action for Star would be to charge the
answer
low price and earn a profit of $40
question
a monopolist is inefficient from societys point of view because
answer
it underproduces output and charges a price above marginal cost
question
game theory is used to explain
answer
strategic behavior
question
which of the following characteristics is prevalent to oligopolies
answer
consideration of rivals
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