Question 1 ( P 2 - MC) × ( Q 1C + Q 2 ). ( P 1 - MC) × ( Q 1C + Q 2 ). ( P 2 - P
ID: 1202319 • Letter: Q
Question
Question 1
(P2 - MC) × (Q1C + Q2).
(P1 - MC) × (Q1C + Q2).
(P2 - P1) × (Q1C + Q2).
[(P1 - MC) × Q1C] + [(P2 - MC) × Q2].
2.06 points
Question 2
perfectly elastic portion of its demand curve.
perfectly inelastic portion of its demand curve.
elastic portion of its demand curve.
inelastic portion of its demand curve.
1.66 points
Question 3
$20; $27.33
$10; $10.40
$24; $27.33
$30; $20.50
1.66 points
Question 4
$300.
$248.
$198.
$126.
1.66 points
Question 5
$82.
zero.
$54.
$27.
1.66 points
Question 6
$300.
$198.
$180.
$280.
1.66 points
Question 7
maximize profits.
increase output beyond the profit-maximizing level.
reduce output below the profit-maximizing level.
be unable to make a normal profit.
1.66 points
Question 8
between f and g.
h.
g.
f.
1.66 points
Question 9
cannot be determined from the information given.
will be ae per unit sold.
will be bc per unit sold.
will be ac per unit sold.
1.66 points
Question 10
is $10.
is $40.
is $400.
cannot be determined from the information provided.
1.66 points
Question 11
is $10.
is $40.
is $400.
cannot be determined from the information provided.
1.66 points
Question 12
is zero.
is $400.
is $200.
cannot be determined from the information provided.
1.66 points
Question 13
an economic profit of ABHJ.
an economic profit of ACGJ.
a loss of GH per unit.
a loss of JH per unit.
1.66 points
Question 14
in the P2P1 price range.
in the 0P1 price range.
in the P2P4 price range.
only at price P2.
1.66 points
Question 15
at price P3.
at any price below P2.
in the P2P4 price range.
in the P2P3 price range.
1.66 points
Question 16
The diagrams portray neither long-run nor short-run equilibrium.
The diagrams portray both long-run and short-run equilibrium.
The diagrams portray short-run equilibrium but not long-run equilibrium.
The diagrams portray long-run equilibrium but not short-run equilibrium.
1.66 points
Question 17
pure competitor and Firm B is a pure monopoly.
pure competitor, as is Firm B.
pure monopoly and Firm B is a pure competitor.
pure monopoly, as is Firm B.
1.66 points
Question 18
ATC must be $4.
MC must be $4.
MR must be $4.
MC must be zero.
1.66 points
Question 19
(A) there will be only a normal profit in the long run, while in (B) an economic profit can persist.
(A) price exceeds marginal cost, resulting in allocative inefficiency.
(B) price equals marginal cost, resulting in allocative efficiency.
(B) equilibrium price and quantity will be e and h, respectively.
1.66 points
Question 20
producing the profit-maximizing output but is failing to minimize production costs.
incurring X-inefficiency but is producing that output at which all existing economies of scale might be realized.
incurring X-inefficiency and is failing to produce the output at which all economies of scale might be realized.
producing that output with the most efficient combination of inputs and is realizing all existing economies of scale.
1.66 points
Question 21
a market characterized by government regulation of price and output.
either an imperfectly competitive or a purely competitive seller.
a purely competitive seller.
an imperfectly competitive seller.
1.66 points
Question 22
lines B and C respectively.
lines A and C respectively.
lines A and B respectively.
line B.
1.66 points
Question 23
-$1.
$1.
$4.
$24.
1.66 points
Question 24
A.
B.
C.
D.
1.66 points
Question 25
(Consider This) Approximately what percentage of start-up firms in the United States go bankrupt within the first two years?
3.5.
10.2.
22.
53.
1.66 points
Question 26
(Consider This) Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. Which of the following conditions of price discrimination explains why this occurs?
The seller must have some monopoly power; that is, it must be able to set the product price.
The seller must be able to identify buyers by group characteristics such as age or income.
Groups must have different elasticities of demand for the product.
The items can be bought by people in the low-price group and transferred to members of the high-price group.
1.66 points
Question 27
(Consider This) The average life expectancy of a U.S. business is approximately:
2 years.
5.5 years.
10.2 years.
22 years.
1.66 points
Question 28
(Last Word) Eliminating patents would tend to:
stimulate innovation in all industries.
discourage innovation in all industries.
encourage innovation in products made up of many different technologies but discourage innovation of easy-to-copy products requiring large R&D costs to create.
discourage innovation in products made up of many different technologies but encourage innovation of easy-to-copy products requiring large R&D costs to create.
1.66 points
Question 29
(Last Word): Network effects on the Internet:
help firms like Google and Facebook dominate their respective markets.
allow many firms to operate, making Internet markets highly competitive.
cause economies of scale to be exhausted quickly.
create a level playing field for all types of media, communication, and commerce on the Internet.
1.66 points
Question 30
A decreasing-cost industry is one in which:
contraction of the industry will decrease unit costs.
input prices fall or technology improves as the industry expands.
the long-run supply curve is perfectly elastic.
the long-run supply curve is upsloping.
1.66 points
Question 31
A nondiscriminating profit-maximizing monopolist:
will never produce in the output range where marginal revenue is positive.
will never produce in the output range where demand is inelastic.
will never produce in the output range where demand is elastic.
may produce where demand is either elastic or inelastic, depending on the level of production costs.
1.66 points
Question 32
A pure monopolist should never produce in the:
elastic segment of its demand curve because it can increase total revenue and reduce total cost by lowering price.
inelastic segment of its demand curve because it can increase total revenue and reduce total cost by increasing price.
inelastic segment of its demand curve because it can always increase total revenue by more than it increases total cost by reducing price.
segment of its demand curve where the price elasticity coefficient is greater than one.
1.66 points
Question 33
A purely competitive firm:
must earn a normal profit in the short run.
cannot earn economic profit in the long run.
may realize either economic profit or losses in the long run.
cannot earn economic profit in the short run.
1.66 points
Question 34
A single-price monopoly is economically inefficient because, at the profit-maximizing output:
marginal revenue exceeds product price at all profitable levels of production.
monopolists always price their products on the basis of the ability of consumers to pay rather than on costs of production.
MC > P.
society values additional units of the monopolized product more highly than it does the alternative products those resources could otherwise produce.
1.66 points
Question 35
An increasing-cost industry is the result of:
higher resource prices that occur as the industry expands.
a change in the industry's minimum efficient scale.
X-inefficiency.
the law of diminishing returns.
1.66 points
Question 36
$5.00.
$2.90.
$3.35.
$4.50.
1.66 points
Question 37
profit of $8.50.
profit of $7.50.
profit of $16.
loss of $14.
1.66 points
Question 38
$120.
$250.
$300.
$420.
1.66 points
Question 39
Assume a purely competitive increasing-cost industry is initially in long-run equilibrium and that an increase in consumer demand occurs. After all economic adjustments have been completed, product price will be:
lower, but total output will be larger than originally.
higher and total output will be larger than originally.
lower and total output will be smaller than originally.
higher, but total output will be smaller than originally.
1.66 points
Question 40
At its profit-maximizing output, a pure nondiscriminating monopolist achieves:
neither productive efficiency nor allocative efficiency.
both productive efficiency and allocative efficiency.
productive efficiency but not allocative efficiency.
allocative efficiency but not productive efficiency.
1.66 points
Question 41
Barriers to entering an industry:
encourage allocative efficiency.
encourage productive efficiency.
are the basis for monopoly.
apply only to purely monopolistic industries.
1.66 points
Question 42
For a pure monopolist the relationship between total revenue and marginal revenue is such that:
marginal revenue is positive when total revenue is at a maximum.
total revenue is positive when marginal revenue is increasing, but total revenue becomes negative when marginal revenue is decreasing.
marginal revenue is positive when total revenue is increasing, but marginal revenue becomes negative when total revenue is decreasing.
marginal revenue is positive so long as total revenue is positive.
1.66 points
Question 43
If a monopolist were to produce in the inelastic segment of its demand curve:
total revenue would be at a maximum.
marginal revenue would be positive.
the firm would not be maximizing profits.
it would necessarily incur a loss.
1.66 points
Question 44
If a monopolist's marginal revenue is $3.00 and its marginal cost is $4.50, it will increase its profits by:
reducing output and raising price.
reducing both output and price.
increasing both price and output.
raising price while keeping output unchanged.
1.66 points
Question 45
If a purely competitive firm is producing at the MR = MC output level and earning an economic profit, then:
the selling price for this firm is above the market equilibrium price.
new firms will enter this market.
some existing firms in this market will leave.
there must be price fixing by the industry's firms.
1.66 points
Question 46
If a purely competitive firm is producing where price exceeds marginal cost, then:
the firm will fail to maximize profit, but resources will be efficiently allocated.
the firm will fail to maximize profit and resources will be overallocated to the product.
the firm will fail to maximize profit and resources will be underallocated to the product.
resources will be underallocated to the product, but the firm will maximize profit.
1.66 points
Question 47
If a regulatory commission wants to establish a socially optimal price for a natural monopoly, it should select a price:
at which the marginal cost curve intersects the demand curve.
at which marginal revenue is zero.
at which the average total cost curve intersects the demand curve.
that corresponds with the equality of marginal cost and marginal revenue.
1.66 points
Question 48
In long-run equilibrium, purely competitive markets:
minimize total cost.
maximize the sum of consumer surplus and producer surplus.
yield economic profits to most sellers.
inevitably degenerate into monopoly in increasing-cost industries.
1.66 points
Question 49
Long-run competitive equilibrium:
is realized only in constant-cost industries.
will never change once it is realized.
is not economically efficient.
results in zero economic profits.
1.66 points
Question 50
Pure monopoly refers to:
any market in which the demand curve to the firm is downsloping.
a standardized product being produced by many firms.
a single firm producing a product for which there are no close substitutes.
a large number of firms producing a differentiated product.
1.66 points
Question 51
Suppose a purely competitive, increasing-cost industry is in long-run equilibrium. Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price:
and industry output will be less than the initial price and output.
will be greater than the initial price, but the new industry output will be less than the original output.
will be less than the initial price, but the new industry output will be greater than the original output.
and industry output will be greater than the initial price and output.
1.66 points
Question 52
Suppose that a pure monopolist can sell 20 units of output at $10 per unit and 21 units at $9.75 per unit. The marginal revenue of the 21st unit of output is:
$9.75.
$204.75.
$4.75.
$.25.
1.66 points
Question 53
The gains to monopolists from exercising market power:
exceed the losses to consumers in monopoly markets, resulting in a net gain to society.
equal the losses to consumers in monopoly markets, resulting in no net change for society.
are less than the losses to consumers in monopoly markets, resulting in a net loss to society.
create smaller deadweight losses than occur in purely competitive industries.
1.66 points
Question 54
The theory of creative destruction was advanced many years ago by:
Bill Gates.
Alfred Marshall.
Joseph Schumpeter.
Adam Smith.
1.66 points
Question 55
When LCD televisions first came on the market, they sold for at least $1,000, and some for much more. Now many units can be purchased for under $400. These facts imply that:
the LCD television industry was once competitive but is now monopolistic.
fewer firms produce LCD televisions than was the case five or ten years ago.
the demand curve for LCD televisions has shifted leftward.
the LCD television industry is a decreasing-cost industry.
1.66 points
Question 56
Which of the following is a characteristic of pure monopoly?
Close substitute products.
Barriers to entry.
The absence of market power.
"Price taking."
1.66 points
Question 57
Which of the following is an example of creative destruction?
An economic recession forces firms out of business.
Automobile production causes the wagon industry to shut down.
Apple earns more economic profits than other manufacturers of MP3 players.
Starbucks shuts down stores to create greater demand for its remaining outlets.
1.66 points
Question 58
Which of the following is correct?
Both purely competitive and monopolistic firms are "price takers."
Both purely competitive and monopolistic firms are "price makers."
A purely competitive firm is a "price taker," while a monopolist is a "price maker."
A purely competitive firm is a "price maker," while a monopolist is a "price taker."
1.66 points
Question 59
Which of the following is not a possible source of natural monopoly?
Large-scale network effects.
Simultaneous consumption.
Greater use of specialized inputs.
Rent-seeking behavior.
1.66 points
Question 60
Which of the following will not hold true for a competitive firm in long-run equilibrium?
P equals AFC.
P equals minimum ATC.
MC equals minimum ATC.
P equals MC.
(P2 - MC) × (Q1C + Q2).
(P1 - MC) × (Q1C + Q2).
(P2 - P1) × (Q1C + Q2).
[(P1 - MC) × Q1C] + [(P2 - MC) × Q2].
Explanation / Answer
For Q1-24 Image is not there
25 53
26 Groups must have different elasticities of demand for the product.
27 22 years.
28 discourage innovation in all industrie
29 cause economies of scale to be exhausted quickly.
30 input prices fall or technology improves as the industry expands
31 will never produce in the output range where demand is inelastic.
32 segment of its demand curve where the price elasticity coefficient is greater than one.
33 cannot earn economic profit in the long run.
34 monopolists always price their products on the basis of the ability of consumers to pay rather than on costs of production.
35 the law of diminishing returns.
39 higher and total output will be larger than originally.
40 neither productive efficiency nor allocative efficiency.
41 are the basis for monopoly
42 total revenue is positive when marginal revenue is increasing, but total revenue becomes negative when marginal revenue is decreasing.
43 the firm would not be maximizing profits.
44 raising price while keeping output unchanged.
45 the selling price for this firm is above the market equilibrium price
46 resources will be underallocated to the product, but the firm will maximize profit.
47 at which the marginal cost curve intersects the demand curve.
48 maximize the sum of consumer surplus and producer surplus.
49 Results in Zero economic profit
50 a single firm producing a product for which there are no close substitutes
51 and industry output will be less than the initial price and output.
52 $204.75
53 are less than the losses to consumers in monopoly markets, resulting in a net loss to society
54 Joseph Schumpeter
55 the LCD television industry is a decreasing-cost industry.
56 Barriers to entry.
57 Apple earns more economic profits than other manufacturers of MP3 players.
58 A purely competitive firm is a "price taker," while a monopolist is a "price maker.
59. Simultaneous consumption.
60 P equals AFC.