PLEASE ANSWER ALL QUESTIONS. Expenditures on advertising______always lower avera

Question

PLEASE ANSWER ALL QUESTIONS.

Expenditures on advertising______always lower average total cost because whenever a firm advertises, it increases the quantity sold cannot lower average total cost because when a firm advertises it increases its costs are variable costs so do not affect the average total cost can lower average total cost if tire advertising increases the quantity sold by a large enough amount If firms in an industry differentiated their products and made economic profits in the short-run, what other characteristic would lie important to determine if this is an oligopoly or a monopolistically competitive market? the number of close substitutes for the good being produced the number of firms in the market the number of buyers in the market if the good being sold is a normal or inferior good In_____market structure, a firm prime s output depends________. an oligopoly; only on its own marginal revenue and marginal cost curves a monopolistically competitive; in part on its competitors prime price and quantity decisions a monopolistically competitive: only on its marginal revenue curve an oligopoly; in part on its competitors' price and quantity decisions The small town of Narberth has two pizza stores. Which of the following statements are correct? The profits of each store depend on the price of the pizza at the other store. Both stores would increase their profit if they cooperated in setting their prices. 1 only II only Both I and II Neither I nor II In the market for batteries, the four largest firms earn 90% of the total revenue and there are 35 firms in the industry. This industry is best described as monopoly. oligopoly. monopolistic competition. perfect competition. In what type of market is a cartel possible? a market in which there are many firms a market in which firms sell a homogeneous good a market in which firms sell a differentiated good a market in which there are only a few firms and barriers to entry exist

Explanation / Answer

28

D

because

TC=FC+VC

A firm will be able to reduce it average total cost if the advertising increases the quantity sold by a large enough amount.Advertising costs are a part of fixed costs.Therefore, in order to recover this the amount sold should be large enough to cover this fixed cost.

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