Quiz

A  allows a firm to sell any quantity it wishes

B  allows a firm to raise the prevailing market price

C  shapes perceived demand for a price taker

D  shapes consumers intangible preferences

A  the sales of the firm that increased its price will decline sharply.

B  the sales of the firm with the higher price will decline slightly.

C  the firm with the increased price will have its higher profits sustained through cooperation.

D  the egos of all the top executives will eventually lead to cooperation at that higher price.

A  demand curves can become kinked in appearance.

B  each of these firms must act as a price-taker.

C  each of these firms must act as a price-maker.

D  collusion amongst them will most often result.

A  hold down output in the short-run.

B  divide up the monopoly level of profit amongst themselves.

C  charge a higher price in the short-run.

D  both b and c above are correct.

A  the perceived demand curve for each firm will shift to the right.

B  the perceived demand and marginal revenue curves for each firm will shift to the right.

C  the perceived demand and marginal revenue curves for each firm will shift to the left.

D  the marginal revenue curves for each firm will shift to the right.

A  the steeper perceived demand curve to become flatter.

B  a steeper perceived demand curve, as well as c above.

C  perceived demand curve to shift to the right.

D  perceived demand curve to shift to the left.

A  equal to average cost, in the long run.

B  equal to marginal cost, both in the short run and in the long run.

C  equal to average cost, both in the short run and in the long run.

D  equal to marginal cost, in the short run.

A  because the demand curve for a monopolistic competitor is upward sloping

B  a monopolist faces the market demand curve and a monopolist competitor does not

C  because the demand curve perceived by the monopolist is flatter than that of a monopolist competitor

D  a monopolist competitor faces the market demand curve and a monopolist does not

A  A monopoly

B  Collusion

C  A cartel

D  An oligopoly

A  U shaped

B  flat

C  upward-sloping

D  downward-sloping

A  $3.50 or less

B  $4.00 or less

C  $3.90 or less

D  $3.40 or less

A  irregularly high unsustainable profits.

B  government deregulation.

C  elimination of barriers to entry

D  abnormally high sustained profits.

A  output will be too small and its price too low.

B  output will be too large and its price too low.

C  output will be too small and its price too high.

D  output will be too large and its price too high.

A  government regulations that provide no barriers to entry, exit, or competition

B  a few impediments to limit new firms from operating and expanding within the market

C  government rules on prices, quantities, or conditions of entry in an industry

D  sufficient strength to prevent or discourage potential competitors from entering the market

A  raise prices, cut production, and realize positive economic profits.

B  acquire rights for its investors to produce and sell their product.

C  have legal protection to prevent copying its methods of production for commercial use.

D  have a patent giving it exclusive legal rights to make, use, and sell for a limited time.

A  a sole producer of a narrowly defined product class, such as brown, Grade A eggs produced in Eagle County, Colorado

B  a sole producer of a product for which good substitutes are lacking in a market with high barriers to entry

C  a large, multinational firm that produces a single product in a narrow product class

D  a firm that is very large relative to all its competitors within a narrow product class

A  patent laws

B  market forces

C  technological advantages

D  deregulation

A  minimized at the output that maximizes the industry’s profitability.

B  lowest when there are a large number of producers in the industry.

C  lowest when a single firm generates the entire output of the industry.

D  lower for the smaller firms than for larger firms.

A  there is a single seller in a particular industry

B  there are limited sellers in a particular industry

C  there are a few sellers in a given industry

D  there is only one seller, therefore no industry

A  oligopoly

B  patent

C  monopoly

D  monopolistic competition

A  producing less at any market price will off-set marginal cost .

B  expanding output levels at any given price will be profitable.

C  the firm’s demand curve will also shift to the left.

D  the firm’s marginal cost curve will shift to the left.

A  opportunity cost; including economic profit

B  economic profit; excluding opportunity cost

C  accounting profit; including opportunity cost

D  accounting profit; excluding opportunity cost

A  short run; the quantity of output where profits are highest

B  short run; profits by ignoring the concept of total cost analysis

C  long run; methods to reduce production and shut down

D  long run; the quantity of output where profits are highest

A  keep the business open in the short-run, and plan to expand the business in the long-run.

B  raise her prices above the perfectly competitive level set by the market.

C  keep the business open in the short-run, but plan to go out of business in the long-run.

D  lay-off her staff, break her lease, and close the business down immediately.

A  could likely result in a notable loss of sales to competitors

B  will likely cause the firm to reach its shutdown point immediately

C  will cause the firm to recover some of its opportunity costs

D  is a sure sign the firm is raising the given price in the market

A  at all levels of output shifts marginal costs to the right.

B  will determine what price to produce at given the market demand.

C  can also be interpreted as shifts of their respective marginal cost curves.

D  shifts marginal costs to the right enabling both to produce more at any given market price.

A  supply curve

B  demand curve

C  average total cost curve

D  average variable cost curve

A  8% of output

B  6% of output

C  12% of output

D  10% of output

A  considering opportunity costs.

B  considering capital investments.

C  preparing to exit operations.

D  preparing to reach its shutdown point.