Question 1

Use the following to answer questions below:
 
-Refer to the graph of Market 1. A monopolistically competitive firm that is maximizing profit given the unit cost curves displayed in the graph

Accepted Answer

A)   is in long-run equilibrium.
B)   will produce less and charge a lower price in the long run.
C)   will produce less and charge a higher price in the long run.
D)   will produce more and charge a lower price in the long run.E) B) and C)
F) A) and B)

Question 2

Monopoly is a market structure in which there is only one buyer of a product for which there are no close substitutes.

Accepted Answer

A) True 
 B)False

Question 3

If a monopolist has a linear demand curve, then it has a linear marginal revenue curve.

Accepted Answer

A) True 
 B)False

Question 4

A monopolist faces a demand function defined as Q = 80 - 4P. The monopolist's marginal cost is equal to $10 at all levels of output. What price should the firm charge in order to maximize profits?

Accepted Answer

A)   2
B)   5
C)   10
D)   20E) A) and B)
F) B) and D)

Question 5

An appreciation of the U.S. dollar relative to foreign currencies will make

Accepted Answer

A)   foreign imports more expensive in the United States.
B)   U.S. exports more expensive in foreign countries.
C)   the demand for U.S. exports increase.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 6

Use the following to answer questions below
 
-Refer to the graph of unit cost curves 1. If the market price is 35, then a profit-maximizing competitive firm with these short-run unit cost curves

Accepted Answer

A)   will not produce any output.
B)   will produce output and will make economic losses.
C)   will produce output and will make an economic profit of zero.
D)   will produce output and will make economic profits.E) A) and C)
F) None of the above

Question 7

The short-run supply curve for a monopolistically competitive firm is identical to the upward-sloping portion of the firm's marginal cost curve above average variable cost.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer questions below:
 
-Refer to the graph of demand and marginal revenue. If a profit-maximizing monopolist with a constant unit cost equal to $20 faces the demand curve plotted in the graph, then what will the monopolist's total revenue and the profit be?

Accepted Answer

A)   Total revenue: $80, profit=$40.
B)   Total revenue: $160, profit=$80.
C)   Total revenue: $160, profit=$120.
D)   Total revenue: $240, profit=$160.E) A) and B)
F) A) and C)

Question 9

Use the following to answer questions below
 
-Refer to the graph of unit cost curves 1. If the market price is 25, then a profit-maximizing competitive firm with these short-run unit cost curves

Accepted Answer

A)   will not produce any output.
B)   will produce output and will make economic losses.
C)   will produce output and will make an economic profit of zero.
D)   will produce output and will make economic profits.E) All of the above
F) A) and B)

Question 10

If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is

Accepted Answer

A)   a monopolist.
B)   an oligopolist.
C)   a perfect competitor.
D)   a monopolistic competitor.E) A) and B)
F) C) and D)

Question 11

Use the following to answer questions below:
 
-Refer to the graph of demand and marginal revenue. If a profit-maximizing monopolist with a constant unit cost equal to $40 faces the demand curve plotted in the graph, then the monopolist's profit

Accepted Answer

A)   will be equal to $80.
B)   will be equal to $90.
C)   will be equal to $160.
D)   Will be equal to $170.E) All of the above
F) A) and D)

Question 12

Assume that a profit-maximizing perfectly competitive firm currently charges the price of $10. The firm also incurs the average total cost of $8, the average variable cost of $7. From this information, we can conclude that the marginal cost of the firm is

Accepted Answer

A)   $10
B)   $8
C)   $7
D)   None of the aboveE) None of the above
F) C) and D)

Question 13

Which of the following types of firms is most likely to be a monopolistic competitor?

Accepted Answer

A)   A local telephone company
B)   An automobile manufacturer
C)   A restaurant
D)   All of the above are likely to be monopolistic competitors.E) A) and D)
F) All of the above

Question 14

An increase in the U.S. demand for British products would tend to cause an appreciation of the British pound.

Accepted Answer

A) True 
 B)False

Question 15

A firm has the following total revenue and total costs functions.
 $$T R = 0.5 Q - 0.5 Q ^ { 2 } , \quad T C = 0.5 Q ^ { 2 } - Q$$ Compute the optimal quantity the firm should produce and sell.

Accepted Answer

The answer of A firm has the following total revenue...

Question 16

Use the following to answer questions below:
 
-A perfectly competitive firm is selling 150 units of output per week at a price of $10. Average total cost is $11, average variable cost is $8, and marginal cost is $12. From this information, it is clear that the firm

Accepted Answer

A)   can increase its profit by producing more output per week.
B)   can increase its profit by producing less output per week.
C)   can increase its profit by charging a price above $10.
D)   None of the above is correct.E) None of the above
F) A) and B)

Question 17

Use the following to answer questions below:
 
-A monopolist faces a demand function defined as Q = 40 - 2P. The monopolist's marginal cost is equal to $15 at all levels of output. How many units of output should the firm produce in order to maximize profits?

Accepted Answer

A)   10
B)   7.5
C)   5
D)   None of the above is correct.E) B) and D)
F) A) and B)

Question 18

Use the following to answer questions below
 
-Refer to the graph of unit cost curves 1. If the market price is 40, then a profit-maximizing competitive firm with these short-run unit cost curves

Accepted Answer

A)   will not produce any output.
B)   will produce output and will make economic losses.
C)   will produce output and will make an economic profit of zero.
D)   will produce output and will make economic profits.E) A) and D)
F) B) and C)

Question 19

The market demand function for a product sold by a monopolist is given below:
 $$Q D = 270 - 5 P$$ The monopolist's marginal cost function is given below:
 $$M C = 6 + 2 Q$$ Calculate the equilibrium price and quantity.

Accepted Answer

The answer of The market demand function for a product...

Question 20

Use the following to answer questions below:
 
-The restaurant industry has a market structure that comes closest to

Accepted Answer

A)   monopolistic competition.
B)   oligopoly.
C)   perfect competition.
D)   monopoly.E) A) and B)
F) B) and C)

Exam 9: Market Structure: Perfect Competition, Monopoly, and Monopolistic Competition

If a monopolist has a linear demand curve, then it has a linear marginal revenue curve.

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Use the following to answer questions below: -Refer to the graph of demand and marginal revenue. If a profit-maximizing monopolist with a constant unit cost equal to $40 faces the demand curve plotted in the graph, then the monopolist's profit

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Assume that a profit-maximizing perfectly competitive firm currently charges the price of $10. The firm also incurs the average total cost of $8, the average variable cost of $7. From this information, we can conclude that the marginal cost of the firm is

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Which of the following types of firms is most likely to be a monopolistic competitor?

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A firm has the following total revenue and total costs functions. TR=0.5Q−0.5Q2,TC=0.5Q2−QT R = 0.5 Q - 0.5 Q ^ { 2 } , \quad T C = 0.5 Q ^ { 2 } - QTR=0.5Q−0.5Q2,TC=0.5Q2−Q Compute the optimal quantity the firm should produce and sell.

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Use the following to answer questions below: -A perfectly competitive firm is selling 150 units of output per week at a price of $10. Average total cost is $11, average variable cost is $8, and marginal cost is $12. From this information, it is clear that the firm

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The market demand function for a product sold by a monopolist is given below: QD=270−5PQ D = 270 - 5 PQD=270−5P The monopolist's marginal cost function is given below: MC=6+2QM C = 6 + 2 QMC=6+2Q Calculate the equilibrium price and quantity.

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Use the following to answer questions below -Refer to the graph of unit cost curves 1. If the market price is 25, then a profit-maximizing competitive firm with these short-run unit cost curves

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If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is

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An increase in the U.S. demand for British products would tend to cause an appreciation of the British pound.

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Use the following to answer questions below -Refer to the graph of unit cost curves 1. If the market price is 40, then a profit-maximizing competitive firm with these short-run unit cost curves

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Use the following to answer questions below: -Refer to the graph of Market 1. A monopolistically competitive firm that is maximizing profit given the unit cost curves displayed in the graph

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An appreciation of the U.S. dollar relative to foreign currencies will make

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Use the following to answer questions below -Refer to the graph of unit cost curves 1. If the market price is 35, then a profit-maximizing competitive firm with these short-run unit cost curves

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Monopoly is a market structure in which there is only one buyer of a product for which there are no close substitutes.

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Use the following to answer questions below: -Refer to the graph of demand and marginal revenue. If a profit-maximizing monopolist with a constant unit cost equal to $20 faces the demand curve plotted in the graph, then what will the monopolist's total revenue and the profit be?

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The short-run supply curve for a monopolistically competitive firm is identical to the upward-sloping portion of the firm's marginal cost curve above average variable cost.

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Use the following to answer questions below: -A monopolist faces a demand function defined as Q = 40 - 2P. The monopolist's marginal cost is equal to $15 at all levels of output. How many units of output should the firm produce in order to maximize profits?

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A monopolist faces a demand function defined as Q = 80 - 4P. The monopolist's marginal cost is equal to $10 at all levels of output. What price should the firm charge in order to maximize profits?

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Use the following to answer questions below: -The restaurant industry has a market structure that comes closest to

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A firm has the following total revenue and total costs functions. $T R = 0.5 Q - 0.5 Q ^ { 2 } , \quad T C = 0.5 Q ^ { 2 } - Q$ Compute the optimal quantity the firm should produce and sell.

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The market demand function for a product sold by a monopolist is given below: $Q D = 270 - 5 P$ The monopolist's marginal cost function is given below: $M C = 6 + 2 Q$ Calculate the equilibrium price and quantity.

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