Question 1
Monopolistic competition is an industry characterized by a:
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A. small number of firms producing identical products, with barriers
... [Show More] to entry for firms.
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B. small number of firms producing similar products, with relatively easy entry for firms.
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C. large number of firms producing similar products, with relatively easy entry for firms.
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D. large number of firms producing identical products, with relatively easy entry for firms.
Answer Key:C Question 2
Imperfect competition is:
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A. a market structure with no more than one firm in the industry.
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B. an industry in which all firms are price takers.
C. a market structure where firms have a degree of monopoly power.
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D. described by all of the above.
Answer Key:C Question 3
Imperfect competition includes:
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A. monopolistic competition and oligopoly.
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B. monopolistic competition and monopoly.
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C. perfect competition and monopoly.
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D. monopoly and oligopoly.
Answer Key:A Question 4
A firm in monopolistic competition maximizes its profit by producing at the level at which:
A. MC = ATC.
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B. MC = AR.
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C. MC = P.
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D. MC = MR.
Answer Key:D Question 5
An industry characterized by many firms, producing similar but differentiated products, in a market with easy entry and exit is called:
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A. perfect competition.
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B. monopoly.
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C. monopolistic competition.
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D. oligopoly.
Answer Key:C Question 6
An oligopoly knows that its affect(s) its and that the of its rivals will affect it.
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A. actions; rivals; reactions
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B. price changes ; total revenue in a positive way; reactions
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C. actions rarely; rivals; actions
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D. price increases; total revenue in the long run only; large but not small price changes
Answer Key:A Question 7
A concentration ratio is used to measure:
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A. efficiency.
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B. diseconomies of scale.
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C. marginal cost.
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D. market dominance.
Answer Key:D Question 8
An industry dominated by a few firms, where each of those firms recognizes that its own choices will affect the choices of its rivals and that its rivals' choices will affect it, is a(n):
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A. monopoly.
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B. oligopoly.
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C. monopolistic competition.
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D. perfect competition.
Answer Key:B Question 9
Price for a firm under monopolistic competition is:
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A. equal to marginal revenue.
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B. greater than marginal revenue.
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C. less than marginal revenue.
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D. greater than total revenue.
Answer Key:B Question 10
Unwritten or unspoken understandings through which firms collude to restrict competition are called:
A. cartelization.
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B. oligopolization.
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C. overt collusion.
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D. tacit collusion.
Answer Key:D
Part 2 of 2 - Profit Maximization for a Firm in Monopolistic Competition 30.0/ 30.0 Points
Question 11
(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Before the innovation reduced the cost, the firm's maximum economic profit was:
A. $0.
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B. $30.
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C. $750.
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D. $4,500.
Answer Key:A Question 12
(Exhibit: Profit Maximization for a Firm in Monopolistic Competition.) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' After the innovation reduced the cost, the firm's maximum economic profit is:
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A. $0.
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B. $30.
C. $1,500.
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D. $3,000.
Answer Key:C Question 13
(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Suppose further that after the innovation reduced the cost to ATC?, it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:
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A. $1,700.
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B. $1,190.
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C. $3,060.
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D. $3,400.
Answer Key:B [Show Less]