Filters
Question type
Study Flashcards

The Jeans Store sells 7 pairs of jeans per day when it charges $100 per pair.It sells 8 pairs of jeans per day at a price of $90 per pair.What is the marginal revenue of the eighth pair of jeans?


A) $20
B) $90
C) $100
D) $700

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

Monopolistically competitive firms have downward-sloping demand curves.In the long run,monopolistically competitive firms earn zero economic profits.These two characteristics imply that in the long run ________.


A) monopolistically competitive markets achieve productive efficiency
B) monopolistically competitive markets achieve allocative efficiency
C) monopolistically competitive firms earn economic profits
D) monopolistically competitive firms have excess capacity

E) C) and D)
F) All of the above

Correct Answer

verifed

verified

Which of the following is true in an oligopoly market?


A) The pricing decisions of all other firms have no effect on an individual firm.
B) Individual firms pay no attention to the behaviour of other firms.
C) Advertising of one firm has no effect on all other firms.
D) One firm's pricing decision affects all the other firms.

E) A) and D)
F) All of the above

Correct Answer

verifed

verified

If a perfectly competitive firm maximises short-run profits,its marginal revenue will be positive and less than its price.

A) True
B) False

Correct Answer

verifed

verified

Which is true if a firm faces a downward-sloping demand curve? AU: Edit ok?


A) The demand for its product must be inelastic.
B) It can control both price and quantity sold.
C) It must reduce its price to sell more units.
D) It will always make a profit.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

In theory,in the long run,monopolistically competitive firms earn zero profits.However,in reality,there are some ways by which a firm can avoid losing profits.Which of the following is one such way?


A) Gradually increase the markup on the goods produced
B) Lower the price of its products to expand its market share
C) Identify new markets and develop products precisely for those markets
D) Find a market niche and keep it as narrow as possible so as to prevent other producers from entering this market segment

E) None of the above
F) All of the above

Correct Answer

verifed

verified

The profit-maximising rule for a monopolistically competitive firm is ______.


A) to produce a quantity that maximises market share
B) to produce a quantity that maximises total revenue
C) to produce a quantity such that marginal revenue equals marginal cost
D) to produce a quantity such that price equals marginal cost

E) B) and D)
F) None of the above

Correct Answer

verifed

verified

Table 9.4  Quantity  Sold  Price  (dollars )  Total  Revenue  (dollars)   Marginal  Revenue Total Cost  (dollars)   Marginal  Cost  Profit  (dollars)  0100⋯2⋯−21998281613372117462420552522642426\begin{array}{|c|c|c|c|c|c|c|}\hline \begin{array}{c}\text { Quantity } \\\text { Sold }\end{array} & \begin{array}{c}\text { Price } \\\text { (dollars ) }\end{array} & \begin{array}{c}\text { Total } \\\text { Revenue } \\\text { (dollars) }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Revenue }\end{array} & \begin{array}{c}\text {Total}\\\text { Cost } \\\text { (dollars) }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Cost }\end{array} & \begin{array}{c}\text { Profit } \\\text { (dollars) }\end{array} \\\hline 0 & 10 & 0 & \cdots & 2 & \cdots & -2 \\\hline 1 & 9 & 9 & & 8 & & \\\hline 2 & 8 & 16 & & 13 & & \\\hline 3 & 7 & 21 & & 17 & & \\\hline 4 & 6 & 24 & & 20 & & \\\hline 5 & 5 & 25 & & 22 & & \\\hline 6 & 4 & 24 & & 26 & & \\\hline\end{array} Table 9.4 lists estimated revenues and costs (per week) for plastic vials (100 vials per box) for the Victoria Biological Supplies Company. Victoria sells plastic vials to university and private research laboratories. -Refer to Table 9.4.Based on the data in the table,which of the following statements is true?


A) The table summarises Victoria's short-run, rather than long-run, market for plastic vials.
B) Victoria could be either a monopolistically competitive or a perfectly competitive firm.
C) Victoria should shut down temporarily.
D) Victoria should advertise more in order to increase the demand for plastic vials.

E) C) and D)
F) B) and C)

Correct Answer

verifed

verified

Only one of the following statements is correct.The statements compare perfectly competitive (PC) markets and monopolistically competitive (MC) markets.Which statement is correct?


A) Productive efficiency is achieved in both PC and MC markets. Allocative efficiency is achieved only in MC markets.
B) Allocative efficiency is achieved in both PC and MC markets. Productive efficiency is achieved only in PC markets.
C) Productive efficiency and allocative efficiency are both achieved in PC markets. Neither is achieved in MC markets.
D) Allocative efficiency is achieved only in PC markets. Productive efficiency is achieved only in MC markets.

E) A) and C)
F) All of the above

Correct Answer

verifed

verified

Table 9.2  Quantity  (cases)   Price  (dollars)   Total Revenue  (dollars)   Total Cost  (dollars)  175756027014085365195105460240115555275130650300155745315190840320230935315280\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Quantity } \\\text { (cases) }\end{array} & \begin{array} { c } \text { Price } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Revenue } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (dollars) }\end{array} \\\hline 1 & 75 & 75 & 60 \\\hline 2 & 70 & 140 & 85 \\\hline 3 & 65 & 195 & 105 \\\hline 4 & 60 & 240 & 115 \\\hline 5 & 55 & 275 & 130 \\\hline 6 & 50 & 300 & 155 \\\hline 7 & 45 & 315 & 190 \\\hline 8 & 40 & 320 & 230 \\\hline 9 & 35 & 315 & 280 \\\hline\end{array} Eco Energy is a monopolistically competitive producer of a sports beverage called Power On. Table 9.2 shows the firm's demand and cost schedules. -Refer to Table 9.2.What is the output (Q) that maximises profit,and what is the price (P) charged?


A) P = $55; Q = 5 cases
B) P = $50; Q = 6 cases
C) P = $45; Q = 7 cases
D) P = $40; Q = 8 cases

E) A) and D)
F) A) and B)

Correct Answer

verifed

verified

If a monopolistically competitive firm breaks even,the firm is earning as much in this industry as it could in any other comparable industry.

A) True
B) False

Correct Answer

verifed

verified

Why are demand and marginal revenue represented by the same curve for a firm in a perfectly competitive market,but by separate curves for a firm in a monopolistically competitive market? __________________________________________________________________________________________________________________________________________________________________________________________

Correct Answer

verifed

verified

A perfectly competitive firm faces a hor...

View Answer

The statement that is true about marginal revenue is:


A) If marginal revenue is zero, it means that quantity demanded falls to zero when a firm changes its price.
B) If marginal revenue is negative, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
C) If marginal revenue is positive, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.
D) Marginal revenue increases as price falls and quantity sold increases.

E) All of the above
F) None of the above

Correct Answer

verifed

verified

Which of the following is not a characteristic of oligopoly?


A) The ability to influence price
B) A small number of firms
C) Low barriers to entry
D) Interdependent firms

E) None of the above
F) A) and D)

Correct Answer

verifed

verified

A monopolistically competitive firm will _____.


A) charge the same price as its competitors do
B) always produce at the minimum efficient scale of production
C) have some control over its price because its product is differentiated
D) produce an output level that is productively and allocatively efficient

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

One way by which firms differentiate their products is to find a market niche.

A) True
B) False

Correct Answer

verifed

verified

Table 9.3  Quantity  Price  (dollars)   Total Revenue  (dollars)   Total Variable  Cost  (dollars)   Total Cost  (dollars)  0210050120201666219383181318544595417685910951680751256159093143714981121628131041401909121081802301011110230280\begin{array} { | c | c | c | c | c | } \hline \text { Quantity } & \begin{array} { c } \text { Price } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Revenue } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Variable } \\\text { Cost } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (dollars) }\end{array} \\\hline 0 & 21 & 0 & 0 & 50 \\\hline 1 & 20 & 20 & 16 & 66 \\\hline 2 & 19 & 38 & 31 & 81 \\\hline 3 & 18 & 54 & 45 & 95 \\\hline 4 & 17 & 68 & 59 & 109 \\\hline 5 & 16 & 80 & 75 & 125 \\\hline 6 & 15 & 90 & 93 & 143 \\\hline 7 & 14 & 98 & 112 & 162 \\\hline 8 & 13 & 104 & 140 & 190 \\\hline 9 & 12 & 108 & 180 & 230 \\\hline 10 & 11 & 110 & 230 & 280 \\\hline\end{array} Table 9.3 shows the demand and cost schedules for a monopolistically competitive firm. -Refer to Table 9.3.The average variable cost of production at its optimal output level is _____.


A) $0 (because its optimal output = 0)
B) $15
C) $14.75
D) $29

E) A) and D)
F) All of the above

Correct Answer

verifed

verified

Price leadership is a form of explicit collusion where one firm in an oligopoly announces a price change and expects all other firms to follow suit.

A) True
B) False

Correct Answer

verifed

verified

Assuming that the total market size remains constant,a monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing in the long run because ______.


A) new entrants into the market are more likely to have cutting edge products
B) as the firm raises its price in the long run, it will lose some customers to new entrants in the market
C) some of its customers have switched to purchasing the products of new entrants in the market
D) its costs of production rises

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

Table 9.4  Quantity  Sold  Price  (dollars )  Total  Revenue  (dollars)   Marginal  Revenue Total Cost  (dollars)   Marginal  Cost  Profit  (dollars)  0100⋯2⋯−21998281613372117462420552522642426\begin{array}{|c|c|c|c|c|c|c|}\hline \begin{array}{c}\text { Quantity } \\\text { Sold }\end{array} & \begin{array}{c}\text { Price } \\\text { (dollars ) }\end{array} & \begin{array}{c}\text { Total } \\\text { Revenue } \\\text { (dollars) }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Revenue }\end{array} & \begin{array}{c}\text {Total}\\\text { Cost } \\\text { (dollars) }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Cost }\end{array} & \begin{array}{c}\text { Profit } \\\text { (dollars) }\end{array} \\\hline 0 & 10 & 0 & \cdots & 2 & \cdots & -2 \\\hline 1 & 9 & 9 & & 8 & & \\\hline 2 & 8 & 16 & & 13 & & \\\hline 3 & 7 & 21 & & 17 & & \\\hline 4 & 6 & 24 & & 20 & & \\\hline 5 & 5 & 25 & & 22 & & \\\hline 6 & 4 & 24 & & 26 & & \\\hline\end{array} Table 9.4 lists estimated revenues and costs (per week) for plastic vials (100 vials per box) for the Victoria Biological Supplies Company. Victoria sells plastic vials to university and private research laboratories. -Refer to Table 9.4.What is true at Victoria's profit-maximising output?


A) Profit equals $2.
B) Total revenue equals $24 and total cost equals $20.
C) Total revenue equals $25 and total cost equals $22.
D) Total revenue equals $21 and total cost equals $17.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Showing 21 - 40 of 350

Related Exams

Exam 1

Economics: Foundations and Models

142 Questions

Exam 2

Choices and Trade-Offs in the Market

192 Questions

Exam 3

Where Prices Come From: the Interaction of Demand and Supply

241 Questions

Exam 4

Elasticity: The Responsiveness of Demand and Supply

224 Questions

Exam 5

Economic Efficiency,government Price Setting and Taxes

169 Questions

Exam 6

Technology,production and Costs

255 Questions

Exam 7

Firms in Perfectly Competitive Markets

269 Questions

Exam 8

Monopoly Markets

187 Questions

Exam 10

The Markets for Labour and Other Factors of Production

250 Questions

Exam 11

Government Intervention in the Market

325 Questions

Exam 12

Social Policy and Inequality

125 Questions

Exam 13

Gdp: Measuring Total Production, income and Economic Growth

202 Questions

Exam 14

Unemployment and Inflation

230 Questions

Exam 15

Aggregate Demand and Aggregate Supply Analysis

166 Questions

Exam 16

Money,banks and the Reserve Bank of Australia

110 Questions

Exam 17

Monetary Policy

111 Questions

Exam 18

Fiscal Policy

138 Questions

Exam 19

Comparative Advantage and the Gains From International Trade

131 Questions

Exam 20

Macroeconomics in an Open Economy

276 Questions

Show Answer