question
Which of the following statements relating to a firm in an imperfectly competitive market and a firm in a perfectly competitive market is true?
answer
An imperfectly competitive firm must lower its price to increase sales, while a perfectly competitive firm can increase sales by increasing output at the current price
question
Which of the following statements relating to a firm in an imperfectly competitive market and a firm in a perfectly competitive market is true?
answer
When an imperfectly competitive firm raises the price, it will likely continue to sell some units of output, but when a perfectly competitive firm raises the price, it will sell no output
question
If Zeta, a single producer, had exclusive control of a key resource needed to produce good Z, a likely result would be which of the following?
answer
There would be a barrier to entry, and Zeta would have a monopoly on good Z
question
Consumer surplus on graph
answer
Uppermost left triangle
question
Which of the following statements concerning a natural monopoly is true?
answer
If the monopolist chooses to produce the quantity at which price is equal to average cost, it would earn a normal profit
question
Which of the following is true for a monopolist that engages in perfect price discrimination
answer
The monopolist sells the allocatively efficient quantity of output
question
Assume a profit-maximizing monopolist is able to price discriminate, dividing its consumers into two distinct groups charging each a different price. Based on this information, which of the following is true?
answer
The group with the more elastic demand will pay the lower price
question
Which of the following is true for a firm in long-run equilibrium in monopolistic competition?
answer
There is neither allocative nor productive efficiency
question
Which of the following is true of monopolistically competitive firms in long-run equilibrium?
answer
Marginal revenue equals marginal cost, and price equals average total cost
question
In which of the following market structures is firm interdependence and strategic behavior most commonly observed?
answer
Oligopoly
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