Question

In: Economics

1.Companies can experience Economies of Scale and get better at production as they increase output quantity....

1.Companies can experience Economies of Scale and get better at production as they increase output quantity. Which of the following is not a reason for this effect? Group of answer choices: a.Labor Specialization b. Managerial Specialization c. Efficient Capital Implementation d. Bureaucratic Decision Making

2. Smartphone flashlight apps are readily available from a variety of different software companies and they all perform the same function. Which market model would these be an approximate example of? Group of answer choices a .Pure Monopoly b.Perfect Competition c.Oligopoly d.Monopolistic Competition

3.Just six American film production companies account for about 90% of all domestic revenue in the movie industry. The US movie industry could be considered to be: Monopolistic Competition Pure Competition an Oligopoly Market a Pure Monopoly

4.What is a characteristic of a purely competitive market? Free Entry/Exit of Marketplace Companies Set Market Price None of These All of These Limited Number of Firms

5. What is the elasticity of demand for any good being produced by a purely competitive firm? >1 <1 ∞ 0

6.For a purely competitive firm, what decisions should they make when the market price (their marginal revenue) is at the following levels?

Less than ATC and less than AVC : a. Minimize loss b. Shut down c.Minimize profit d.Maximize loss e.Maximize Profit

Less than ATC and greater than AVC: a. Minimize loss b. Shut down c.Minimize profit d. Maximize loss e. Maximize Profit

Greater than ATC and greater than AVC: a. Minimize loss b. Shut down c.Minimize profit d. Maximize loss e. Maximize Profit

7. Price is taken as 'given' by an individual firm selling in a purely competitive market because:

-Each seller supplies a negligible fraction of total market share

-product differentiation is reinforced by extensive advertising

-The firm's demand curve is downward-sloping

-There are no good substitutes for the firm's product

8. In the long run a firm will choose a plant size that has the:

-Maximum level of resource use per unit of the total product of output

-Minimum of average fixed costs

-Minimum average total cost of producing the level of output.

-Capacity to produce the largest quantity of the product

9. Which of the following is true for a purely competitive firm producing at an optimal level?

-Marginal revenue will equal marginal cost

-A decrease in output increases profits.

-The firm makes only normal profits.

-Marginal cost will be greater than marginal revenue

Expert Solution

1) d. Bureaucratic Decision Making

2) b.Perfect Competition

3) an Oligopoly Market

4) Free Entry/Exit of Marketplace Companies

5) ∞

6) b) shutdown

Minimize loss

Maximize profits

7) Each seller supplies a negligible fraction of total market share

8) Minimum average total cost of producing the level of output.

9) The firm makes only normal profits.

Rahul Sunny answered 2 years ago

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