Mike Mathea Bus 203 Assignment 5
Each question has appoint value of 1 point
Figure 1
1. Refer to Figure 1, to maximize profits or minimize losses this firm should produce:
A) E units and charge price C.
B) E units and charge price A.
C) M units and charge price N.
D) L units and charge price LK.
2. Refer to Figure 1, in equilibrium total revenue will be:
A) NM times 0M.
B) 0AJE.
C) 0EGC.
D) 0EHB.
3. Refer to Figure 1, in equilibrium the firm will realize:
A) an economic profit of ABHJ.
B) an economic profit of ACGJ.
C) a loss of GH per unit.
D) a loss of JH per unit.
4. A pure monopolist is:
A) any firm realizing all existing economies of scale.
B) any firm whose demand curve is downsloping.
C) any firm which can engage in price discrimination.
D) a one-firm industry.
5. Economic profit in the long run is:
A) possible for both a pure monopoly and a pure competitor.
B) possible for a pure monopoly, but not for a pure competitor.
C) impossible for both a pure monopolist and a pure competitor.
D) only possible when barriers to entry are nonexistent.
6. The MR = MC rule:
A) applies only to pure competition.
B) applies only to pure monopoly.
C) does not apply to pure monopoly because price exceeds marginal revenue.
D) applies both to pure monopoly and pure competition.
7. Monopolistic competition means:
A) a market situation where competition is based entirely on product differentiation and advertising.
B) a large number of firms producing a standardized or homogeneous product.
C) many firms producing differentiated products.
D) a few firms producing a standardized or homogeneous product.
8. The pure monopolist’s demand curve is:
A) identical with the industry demand curve.
B) of unit elasticity throughout.
C) perfectly inelastic.
D) perfectly elastic.
9. Cartels are difficult to maintain in the long run because:
A) they are illegal in all industrialized countries.
B) individual members may find it profitable to cheat on agreements.
C) it is more profitable for the industry to charge a lower price and produce more output.
D) entry barriers are insignificant in oligopolistic industries.
10. In the United States cartels are:
A) quite common in industries that produce nondurable goods.
B) in violation of the antitrust laws.
C) concentrated in monopolistically competitive industries.
D) encouraged by government policy so firms can achieve economies of scale.
