Question

1. The theory of contestable markets concludes that a.a small number of firms in an industry is strong evidence that they will perform in a non-competitive way b.even if the number of sellers in an industry is small profits can be zero in the industry c.inefficient producers can survive in a contestable market d.a firm in a contestable market will sell at a price above marginal cost e.all of the above

2. The profit-maximizing oligopolist produces where a.price equals marginal cost b.marginal revenue equals marginal cost c.price is greater than average total cost d.a and b e.b and c

3. One of the benefits of a market being monopolistic competitive is a.production at the minimum point of the ATC curve b.the variety of differentiated products c.a larger output than if it were perfectly competitive d.a lower price than if it were perfectly competitive

4. Suppose an industry is made up of four firms, al with equal sales. The four-firm concentration ratio of that industry is a.0.125 b0.50 c.1.00 d.this cannot be determined without more information

5. A monopolistic competitor faces a ___ demand curve and its price is ___ marginal revenue a.horizontal, equal to b.downward-sloping, equal to c.horizontal, greater than d.downward-sloping, greater than

6. Which of the following statements is false? A.the monopolistic competitor, like the perfectly competitive firm, is resource-allocative efficient b.the monopolistic competitor produces that quality of output at which price equals marginal cost c.the monopolistic competitor produces the quantity of output with the lowest per-unit costs d.a,b and c

7. A monopolistic competitor that seeks to maximize profits or minimize losses will produce the quantity of output at which a.its per-unit costs are the lowest b.MR=MC and charge the highest possible per-unit price for it c.MC=ATC and charge the highest possible per-unit price for it d.P=MC and charge the highest possible per-unit price for it e.none of the above

8. Which of the following is true? A.concentration ratios take into account competition from substitute goods b.the four-firm concentration ratio is likely to be larger than the eight-firm concentration ratio c.there are assumed to be insufficient barriers to entry in the theory of oligopoly d.a designer label on a pair of jeans is a way of differentiation one seller’s jeans from another seller’s jeans e.all of the above

9. Which of the following is an example of oligopoly market in which the firms produce a homogeneous product a.aluminum b.soap c.breakfast cereals d.tires e.all of the above

10. Which of the following is true? A.one of the costs of a (single-price) monopolist is that it does not produce the quantity of output at which p=mc b.third-degree price discrimination is sometimes referred to as discrimination among buyers c.a perfectly price-discriminating monopolist is resource-allocative efficient d.price discrimination occurs when the seller charges different prices for the product it sells and the price differences do not reflect cost differences e.none of the above

Answer 1

Answer)

The theory of contestable markets concludes that

b.even if the number of sellers in an industry is small profits can be zero in the industry.

The profit-maximizing oligopolist produces where

b.marginal revenue equals marginal cost

One of the benefits of a market being monopolistic competitive is

b.the variety of differentiated products

Suppose an industry is made up of four firms, al with equal sales. The four-firm concentration ratio of that industry is

C) 1.00

A monopolistic competitor faces a ___ demand curve and its price is ___ marginal revenue

d.downward-sloping, greater than

Which of the following statements is false?

D) A, b and c

A monopolistic competitor that seeks to maximize profits or minimize losses will produce the quantity of output at which

a.its per-unit costs are the lowest b.MR=MC and charge the highest possible price for it.

Which of the following is true?

d.a designer label on a pair of jeans is a way of differentiation one seller’s jeans from another seller’s jeans

Which of the following is an example of oligopoly market in which the firms produce a homogeneous product

d.tires

Which of the following is true?

d.price discrimination occurs when the seller charges different prices for the product it sells and the price differences do not reflect cost differences

If you have any doubts please comment...