25-30 25. Refer to Figure 14-5. When market price is Pi, a profit-maximizing fir
ID: 1126956 • Letter: 2
Question
25-30
25. Refer to Figure 14-5. When market price is Pi, a profit-maximizing firm's total revenue can be represented by the area a. Pl × Q2. d. Pix Q3 26. Refer to Figure 14-5. When market price is Pi, a profit-maximizing firm's total cost can be represented by the area a. P4 x Q d. Total costs cannot be determined from the information in the figure 27. Refer to Figure 14-5. When market price is Pi, a profit-maximizing firm's total profit or loss can be represented by which area? a. Pi x Q3; profit b. (P-P) x Q2; loss c. (P2-Pi) × Qi; loss d. We can't tell because we don't know fixed costs. 28. When a profit-maximizing firm is earning profits, those profits can be identified by a. P×Q. b. (MC- AVC) x Q. c. (P-ATC)×Q. d. (P- AVC) x Q. Which of the following are necessary characteristics of a monopoly? (i) The firm is the sole seller of its product. (ii) The firm's product does not have close substitutes. (iii)The firm generates a large economic profit. (iv) The firm is located in a small geographic market. a. (i) and (ii) b. (i) and (iii) c. (ii) and (iv) d. (i), (ii), and (ii) 29. Monopolistically competitive firms are typically characterized by a. many firms selling products that are similar, but not identical. b. many firms selling identical products. c. a few firms selling products that are similar, but not identical. d. a few firms selling highly different products. 30.Explanation / Answer
30.
A).many firms selling similar Product that are similar, but not identical product
Monopolistic Competition is a market structure in which many
firms sell products that are similar but not identical.
Characteristics of Monopolistic Competition:
1. Many Sellers =) Firms compete.
2. Product Di erentiation =) Each rm faces downward-
sloping demand curve.
3. Free Entry =) Economic profits are 0
Examples of monopolistic competition: Books, CDs, movies,
computer software, restaurants, furniture, and so on.
25.
B) P2 X Q2
Total revenue = Price X Quantity
At price P2, Q2 quantity is demanded so TR = P2.Q2
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