1. For a typical competitive firm, the price in the long run euqilibrium will te

ID: 1178506 • Letter: 1

Question

1. For a typical competitive firm, the price in the long run euqilibrium will tend to:

A. be greater than average cost

B. be equal to average cost

C. be less than average cost

D. intermediate

2. Which of the following is NOT a problem with monopoly?

A. The price does not signal true cost

B. Monopolists typically force customers to purchase more than they want to.

C. A monopolist may not produce at the lowest point of its average cost curve.

D. The quantity produced is typically less than in pure competition.

3. Which of the following does NOT describe oligopolies?

A. The rivals react to business descisions made by other firms.

B. The firm are price-takers.

C. There are just a few firms

D. The products may be either homogeneous or heterogeneous.

4. In a two-firm oligopoly that has decided to jointly maximize profits, we would expect that the output:

A. Would be split fifty-fifty

B. Would be greater than the monopoly quantity.

C. Would be set where the sum of their MC's equals to the industry's MR.

D. Would be determinied by a federal mediator.

1)be equal to average cost

2)B is not a feature of monopoly. a monopolist never forces customers to buy their product.

3)The rivals react to business descisions made by other firms.

4)D is the answer

Since what they are doing is illegal, I would hope that more than a mediator would be involved. But eventually this would be the outcome.

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