Question 10.5 pts When considering perfect competition, the absence of entry bar

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Question 10.5 pts

When considering perfect competition, the absence of entry barriers implies that

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Question 20.5 pts

For a perfectly competitive firm, the short-run break-even point occurs at the level of output where

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Question 30.5 pts

Numerical fill in the blank question: Suppose a perfectly competitive firm has the marginal cost function of MC = 3Q. The market price is given by P = $45. How many units of output will the firm produce? (Just enter your numerical answer – no symbols, units, or text).

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Question 40.5 pts

Numerical fill in the blank question: Suppose that at this same firm’s profit-maximizing level of output, average costs are ATC = $39. What are the firm’s total profits earned? (Just enter your numerical answer – no symbols, dollar signs, units, or text).

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Question 50.5 pts

One problem associated with a monopoly firm is that it

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Question 60.5 pts

A single-price monopolist can sell 7 units at price of $30 per unit and 8 units at a price of $25 per unit. The marginal revenue of the 8th unit is $______.

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Question 70.5 pts

Which of the following conditions hold true for both the perfectly competitive firm and the monopoly at the profit-maximizing output level?

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Question 80.5 pts

When comparing perfect competition and monopoly, a major assumption made is that

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Question 90.5 pts

In Graph 1, the profit-maximizing output and price for this monopoly are

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Question 100.5 pts

In Graph 1, the profit maximizing monopoly will

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Question 110.5 pts

Suppose the (inverse) demand function for a single-price monopoly is P = 350 – 2Q. This means that the marginal revenue function for the monopolist is MR = 350 – 4Q. Assume the marginal cost function is given by MC = 3Q. These functions are pictured above in Graph 2. Find the Q* that the monopoly will produce.  Hint: Q* is found be setting MR = MC.

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Question 120.5 pts

Now find the P* price that the monopolist will charge. This is found by finding the height of the demand curve (willingness to pay) at the Q* quantity you found in the previous question.

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Question 130.5 pts

A monopoly baby goods store has 4 customers, shown in the table below.

If the monopoly store must give all customers the same price, what price should it charge for a baby swing in order to maximize revenue received?

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Question 140.5 pts

If the monopoly store can perfectly price discriminate, what is the maximum amount of revenue it can receive?

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Question 150.5 pts

Which of the following is NOT a characteristic of monopolistic competition?

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Question 160.5 pts

In a long-run monopolistically competitive equilibrium,

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Question 170.5 pts

Advertising by monopolistically competitive firms can do all of the following EXCEPT

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Question 180.5 pts

The demand curve for the product of a monopolistically competitive firm

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Question 190.5 pts

In the long run equilibrium, a monopolistic competitor will produce to the point at which

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Question 200.5 pts

Examine Graph 3. The profit-maximizing output and price for this monopolistically competitive firm is

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Question 210.5 pts

Numerical fill in the blank question: Examine Graph 3. The total revenue earned by this monopolistically competitive firm is __________.  (Just enter your numerical answer – no symbols, dollar signs, units, or text).

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Question 220.5 pts

Numerical fill in the blank question: Examine Graph 3. The total profit earned by this monopolistically competitive firm is __________.  (Just enter your numerical answer – no symbols, dollar signs, units, or text).

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Question 230.5 pts

A horizontal merger involves

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Question 240.5 pts

Based on the table shown, the four-firm concentration ratio in this industry equals what percentage of annual sales?

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Question 250.5 pts

A cartel is a form of

Explanation / Answer

Answer 10- firms can enter and leave the industry without serious impediments

Explanation- All firms are price takers and they earn normal profits in the long run. They cannot influence price,hence they cannot hinder entry or exit of any other firm.

Answer 20-P = MC = ATC

Explanation- At this point economic profit is zero. As Profit= TR-TC,

TR= PxQ and TC= ATCxQ,

since P=ATC, Profit=0

Answer 30- In a perfectly competitive market,P=MC. Hence, 3Q=45. Solving this we get Q=15.

Answer 40-ATC = $39

Total Cost(TC)= ATCxQ=39x15=$585

Total Revenue(TR)=PxQ=15x45=$675

Profit= TR-TC=$675-$585=$90

Answer 50-restricts output and charges a relatively higher price than a purely competitive industry

Explanation- A monopoly charges price such that P>MR and produces at point where MR=MC (less than what is produced in Perfect competition). This price is higher than what is charged in a Perfectly competitive market( P=MC).

Answer 60- MR=(Change in TR/Change in Quantity)

=(25-30)/(8-7)= -5

Answer 70-MR = MC This condition stands true for both Monopoly and Perfect Competition,

In Monopoly, P>MR but MR=MC

In Perfect Competition, P=MR=MC

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