Question 12 pts
In order to calculate the profit per unit, you need to find the difference between
Group of answer choicesprice per unit and average total cost.total revenue and average total cost.
marginal revenue and marginal cost.
total revenue and total cost.
Flag question: Question 2Question 22 pts
Mario makes posters. If he charges $30 for each poster and has an average total cost of $10, his total revenue will be
Group of answer choices$2,000 if he sells 50 posters
$30 regardless of how many posters he sells.
$2000 if he sells 100 posters
$3,000 if he sells 100 posters
Flag question: Question 3Question 32 pts
Thinking about the 4-steps to calculate profit, the profit-maximizing quantity is always where the marginal cost equals
Group of answer choicesmarginal revenue and reads the price from the demand curve at that quantity.
price and computes profit as (P − ATC) × Q.
marginal revenue, which is also the price.
the minimum of average total cost and charges a price equal to minimum average total cost.
Flag question: Question 4Question 42 pts
Price discrimination exists when a firm sells ________ goods at more than one price to ________ groups of customers based on their ______.
Group of answer choicesdifferent; similar; willingness to payexisting; distinct;age
discounted; large; age
identical; different; willingness to pay
Flag question: Question 5Question 52 pts
Which of the following is an example of price discrimination?
Group of answer choicesA deli charges more money if you want avocado on your sandwich.
Hotel rooms with two bathrooms are more expensive than rooms with one bathroom.
Houses with ocean views are more expensive than those without a view.
AAA members receive a discount at certain retail shops if they show their card.
Flag question: Question 6Question 62 pts
When a company successfully price discriminates, it
Group of answer choicescan increase profit for the company
makes consumers better off by increasing consumer surplus
is sometimes inefficient for the market because total surplus decreases
none of the above
Flag question: Question 7Question 72 pts
There is only one company that sells coconut wine. The company will always receive ________ on the 10th bottle of wine than it received on the 9th bottle of wine.
Group of answer choicesmore average revenuemore total revenue
more marginal revenue
less marginal revenue
Flag question: Question 8Question 82 pts
If the firm in the graph above is maximizing profits, they will earn
Group of answer choices$272.none; this firm must shut down or lose all of its fixed cost.
Flag question: Question 9Question 92 pts
Which of the following is true for profit-maximizing companies in perfectly competitive markets and monopolies?
Group of answer choicesFirms earn positive economic profits in the long run.Profits are maximized when marginal cost equals marginal revenue.
Firms earn zero economic profits in the long run.
Price equals marginal revenue.
Flag question: Question 10Question 102 pts
Using the graph above, identify the market structure and profit-maximizing quantity.
Group of answer choicesPerfect Competition, EMonopoly, E
Monopolistic Competition, C
Perfect Competion, C
Flag question: Question 11Question 112 pts
Shafir sells oranges from his tree. He has fixed costs of $0.50 for the sign he made. He sells 30 oranges with an average variable cost of $0.20. Shafir’s_________ for the are __________.
Group of answer choicesaverage fixed costs; $0.25marginal costs; $0.20
total costs; $6.00
total costs; $6.50
Flag question: Question 12Question 122 pts
Katia owns a boutique clothing store. Her total revenue last year was $100,000, and her rent was $36,000. She pays her one employee $24,000, and the cost of ingredients and overhead is $6,000. Katia could earn $33,000 per year as the manager of another store nearby. Her total economic profit was
Group of answer choices$61,500.−$1,000.
Flag question: Question 13Question 132 pts
Khalid used to manage a coffee shop earning $30,000 per year but recently quit to start working at Starbucks. The $30,000 that he gave up is counted as part of his
Group of answer choicesaccounting costs.implicit costs.
Flag question: Question 14Question 142 pts
What quantity will the company produce and what price will they charge?
Group of answer choices150 units; $10100 units; $25
150 units; $25
100 units; $13
Flag question: Question 15Question 152 pts
If the price of a product is equal to the average total cost, the economic profit will be
Group of answer choicesnegative.zero.
proportional to marginal cost.
Flag question: Question 16Question 162 pts
Companies in markets that have free entry and exit
Group of answer choicescan earn positive economic profits, but in the long run, firms have zero economic profits.can earn negative economic profits, but in the long run, firms have zero economic profits.
can earn positive or negative economic profits, but in the long run, firms have negative economic profits.
can earn positive or negative economic profits, but in the long run, firms have zero economic profits.
Flag question: Question 17Question 172 pts
Assuming there are no barriers to entry, companies will enter a market if
Group of answer choicesprice is greater than average total cost.total revenue is less than total cost.
price is less than average total cost.
price is equal to marginal cost.
Flag question: Question 18Question 182 pts
At what price would this firm be losing money?
Group of answer choicesanywhere below $5.above $5.
below $5 but above $4.
Flag question: Question 19Question 192 pts
If this is a perfectly competitive market and the price is $60, profit will be
Group of answer choices$2,000.$4,000.
Flag question: Question 20Question 202 pts
A price taker
Group of answer choiceshas some control over the price it charges.is a characteristic held by a perfectly competitive firm.
must set the price close to the price charged by other sellers.
will always make economic profits.
Flag question: Question 21Question 212 pts
If this is a perfectly competitive market and the current price is $1.00, in the short run this firm will choose to
Group of answer choicescontinue producing and earn a profit.continue producing but incur a loss.
shut down and incur a loss.
shut down and break even.
Flag question: Question 22Question 222 pts
Group of answer choicesis in a competitive market.can make a profit.
cannot make a profit.
is not a monopolist because its MR<P.
Flag question: Question 23Question 232 pts
If this firm is currently producing Q3, what will happen to profit if they increase output?
Group of answer choicesit will increaseit will decrease
it will increase as long as the new level of output is at Q2.
it will remain unchanged.
Flag question: Question 24Question 242 pts
Monopolies produce a ________ quantity and charge a ________ price than perfectly competitive markets.
Group of answer choiceslower; lowerlower; higher
Flag question: Question 25Question 252 pts
Which of the following describes a barrier to entry?
Group of answer choicesFanny charges a lower price than other photographers for portrait sessions.
Mike offers free portrait sketches as a form of advertising.
Kasha obtains a patent for the new app she invented.
Nikko charges a higher price than anyone else for guitar lessons.
Flag question: Question 26Question 262 pts
Which of the following is true about a firm in a monopolistically competitive market?
Group of answer choicesIt can earn an economic profit in the short run, but not the long run.It can earn an economic profit in the short run and the long run.
It can earn an economic profit in the long run, but not the short run.
It cannot earn a economic profit in either the short or long run.
Flag question: Question 27Question 272 pts
A company in a monopolistically competitive market is producing a quantity of 25 and charging $30. It has marginal revenue equal to $21, marginal cost equal to $21, and average total cost equal to $22. Based on this information
Group of answer choicesthe firm is currently maximizing its profit.the firm is earning zero profit.
increasing the quantity produced will raise per-unit costs.
firms are likely to leave this market in the long run.
Flag question: Question 28Question 282 pts
In the short run, a firm in a monopolistically competitive market
Group of answer choicesproduces an output level where marginal revenue equals average total cost.produces an output where marginal revenue equals marginal cost, and the price is determined by demand.
must earn zero economic profits.
maximizes revenues as well as profits.
Flag question: Question 29Question 292 pts
Firms in monopolistically competitive markets can earn
Group of answer choicespositive profit in the short run and in the long run.positive or negative profit in the short run and a zero profit in the long run.
zero profit in the short run and a positive or negative profit in the long run.
zero profit in the short run and in the long run.
Flag question: Question 30Question 302 pts
If existing companies in a monopolistically competitive market are earning positive economic profits
Group of answer choicesnew firms will enter the market.
some existing firms will exit the market.
entry is minimized through government-imposed barriers to entry.
entry isn’t possible.
Flag question: Question 31Question 312 pts
Whenever there is free entry and exit in a market,
Group of answer choicesthe market structure will eventually be characterized by perfect competition in the long run.all firms earn zero economic profits in the long run.
some firms will be able to earn economic profits in the long run.
some firms will be forced to incur economic losses in the long run.
Flag question: Question 32Question 322 pts
In which of the following market structures can firms earn economic profits in the long run?
Group of answer choicesPerfect competition onlyMonopolistic competition only
Monopolistic competition and monopoly
Flag question: Question 33Question 332 pts
Which of the following statements is not correct?
Group of answer choicesMonopolistic competition is different from monopoly because monopolistic competition is characterized by free entry, whereas monopoly is characterized by barriers to entry.Both monopolistic competition and oligopoly fall in between the more extreme market structures of competition and monopoly.
Monopolistic competition is different from oligopoly because each seller in monopolistic competition is small relative to the market, whereas each seller can affect the actions of other sellers in an oligopoly.
Both monopolistic competition and perfect competition are characterized by product differentiation.
Flag question: Question 34Question 342 pts
Which of the following statements is correct?
Group of answer choicesThe more similar Firm A’s product is to Firm B’s product, the more likely Firm A is to advertise.Monopolistically competitive firms advertise in order to increase the elasticity of the demand curve they face.
According to the signaling theory, the more product information an advertisement contains the more effective it is.
Brand names may help consumers if they provide information about the quality of a product when acquiring such information is difficult.
Flag question: Question 35Question 352 pts
Which of the following markets is likely to be an oligopoly?
Group of answer choicesA farmers’ market with many individuals selling basil and tomatoes
A city whose electrical service is provided by one power company
A city with two firms that are licensed to sell school lunches to the local schools
A city with many independently owned nail salons
Flag question: Question 36Question 362 pts
If the quantity a monopoly would produce is 1,000, which of the following would be most likely if two companies collude?
Group of answer choicesEach company produces 1,000 units of output.
Each company produces 400 units of output.
One company produces 400 units of output and the other produces 600 units of output.
One company produces 400 units of output and the other produces 500 units of output.
Flag question: Question 37Question 372 pts
As the number of sellers in an oligopoly increases, it is likely that
Group of answer choicesthe total quantity produced will decrease.
the price charged will increase.
the total quantity produced and the price will decrease.
the total quantity produced will increase.
Flag question: Question 38Question 382 pts
When the Nash equilibrium is reached, which of the following must be true
Group of answer choicesthe market price will be different for each firm.the firms will not have behaved as profit maximizers.
a firm will have chosen its dominant strategy
a firm will not take into account the strategies of competing firms.
Flag question: Question 39Question 392 pts
The total quantity produced by companies in an oligopoly will be
Group of answer choiceshigher than in monopoly markets and higher than in perfectly competitive markets.higher than in monopoly markets and lower than in perfectly competitive markets.
lower than in monopoly markets and higher than in perfectly competitive markets.
lower than in monopoly markets and lower than in perfectly competitive markets.
Flag question: Question 40Question 402 pts
If some companies leave a market, this will most likely result in
Group of answer choicesan increase in market output and an increase in the price of the product.an increase in market output and an decrease in the price of the product.
a decrease in market output and an increase in the price of the product.
a decrease in market output and a decrease in the price of the product.
Flag question: Question 41Question 412 pts
In a market that is characterized by imperfect competition (monopolistic competition or oligopoly),
Group of answer choicesfirms are price takers.there are always a large number of firms.
there are at least a few firms that compete with one another.
the actions of one firm in the market never have any impact on the other firms’ profits.
Flag question: Question 42Question 422 pts
If two companies start to collude, then
Group of answer choicesprice and quantity would rise.price and quantity would fall.
price would rise and quantity would fall.
price would fall and quantity would rise.
Flag question: Question 43Question 432 pts
If one company left a duopoly market where the firms did not collude then
Group of answer choicesprice and quantity would rise.price would rise and quantity would fall.
quantity would rise and price would fall.
quantity and price would fall.
Flag question: Question 44Question 442 pts
Agreements to collude are difficult for companies to maintain because
Group of answer choicesit is hard to figure out the monopoly outcome.
their are usually too many companies.
costs are continually rising so agreements need to be updated often.
each company has an incentive to produce more than the its agreed output level.
Flag question: Question 45Question 452 pts
Which of the following is true for monopolistic competition but not oligopoly?
Group of answer choicesThe monopolistically competitive firm advertises.
The monopolistically competitive firm produces a quantity that is less than the socially optimal level.
There are many buyers in Monopolistic competition.
There are many sellers in Monopolistic competition.
Flag question: Question 46Question 462 pts
If an industry has many competing companies. This industry is
Group of answer choicesan oligopoly if the firms sell differentiated products, but it is monopolistically competitive if the firms sell identical products.an oligopoly if the firms sell differentiated products, but it is perfectly competitive if the firms sell identical products.
monopolistically competitive if the firms sell differentiated products, but it is perfectly competitive if the firms sell identical products.
perfectly competitive if the firms sell differentiated products, but it is monopolistically competitive if the firms sell identical products.
Flag question: Question 47Question 472 pts
For a monopolistically competitive firm,
Group of answer choicesmarginal revenue and price are the same.at the profit-maximizing quantity of output, marginal revenue equals marginal cost.
at the profit-maximizing quantity of output, price equals marginal cost.
at the profit-maximizing quantity of output, price equals the minimum of average total cost.
Flag question: Question 48Question 482 pts
In the short run, a firm in a monopolistically competitive market operates much like a
Group of answer choicesfirm in a perfectly competitive market.firm in an oligopoly.
Flag question: Question 49Question 492 pts
People magazine and US magazine are trying to decide how many subscriptions to sell. If they both sell 200, they will each earn $40,000 in profit. If they both sell 400, they will each earn $25,000 in profit. If one sells 200 and the other sells 400, the one who sells 200 will earn $20,000 in profit and the one who sells 400 will earn $60,000 in profit.
In this game, selling ________ subscriptions a month is a dominant strategy for People.
selling ________ subscriptions a month is a dominant strategy for US.
Group of answer choices200; 400400; 200
Flag question: Question 50Question 502 pts
Walmart and Target are the only stores in a remote town that currently stock and sell the PlayStation 5 video game console. Managers at both stores are simultaneously deciding whether to charge a price of $1,000 or $1,500 for each console. If both stores charge $1,000, they earn a profit of $100,000 each. If both stores charge $1,500, they earn a profit of $200,000 each. If one store charges $1,000 and the other store charges $1,500, the store that charges $1,000 earns a profit of $250,000 and the firm that charges $1,500 earns a profit of $50,000. The Nash Equilibrium is where Walmart and Target ________.
Group of answer choicesboth charge $1,000end up charging $1,000 and $1,500, respectively.
engage in spirited price competition and each earn $200,000 in profit
collude with each other
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