Quiz

A  allows a firm to raise the prevailing market price

B  allows a firm to sell any quantity it wishes

C  shapes perceived demand for a price taker

D  shapes consumers intangible preferences

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

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

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

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

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

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

C  collusion amongst them will most often result.

D  demand curves can become kinked in appearance.

A  hold down output in the short-run.

B  divide up the monopoly level of profit amongst themselves.

C  both b and c above are correct.

D  charge a higher price in the short-run.

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

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

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

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

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

B  the steeper perceived demand curve to become flatter.

C  perceived demand curve to shift to the left.

D  perceived demand curve to shift to the right.

A  equal to marginal cost, in the short 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 average cost, in the long run.

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

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

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

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

A  Collusion

B  An oligopoly

C  A cartel

D  A monopoly

A  flat

B  upward-sloping

C  downward-sloping

D  U shaped

A  $3.90 or less

B  $4.00 or less

C  $3.50 or less

D  $3.40 or less

A  irregularly high unsustainable profits.

B  abnormally high sustained profits.

C  elimination of barriers to entry

D  government deregulation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A  market forces

B  technological advantages

C  deregulation

D  patent laws

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

B  lower for the smaller firms than for larger firms.

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

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

A  there are a few sellers in a given industry

B  there is a single seller in a particular industry

C  there is only one seller, therefore no industry

D  there are limited sellers in a particular industry

A  monopoly

B  oligopoly

C  monopolistic competition

D  patent

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 marginal cost curve will shift to the left.

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

A  accounting profit; excluding opportunity cost

B  economic profit; excluding opportunity cost

C  accounting profit; including opportunity cost

D  opportunity cost; including economic profit

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

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

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

D  long run; methods to reduce production and shut down

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

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

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

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

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

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

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

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

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

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

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

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

A  demand curve

B  average variable cost curve

C  supply curve

D  average total cost curve

A  8% of output

B  10% of output

C  6% of output

D  12% of output

A  preparing to reach its shutdown point.

B  considering capital investments.

C  considering opportunity costs.

D  preparing to exit operations.