Project #90338 - Microeconomics 20 Questions

In the competitive market for figure skate blades, manufacturers offer an array of products that are

 

distinctly different in a particular way.

at opposite ends of the competition spectrum.

distinctly similar in a particular way.

virtually identical on the competition spectrum.

 

Which of the following would be classified as a differentiated product produced by a monopolistic competitor?

natural gas

electricity

Chanel No. 5 (perfume)

 

Pure price competition within some industry means that there must be:

zero economic profit in the short-run.

free entry and exit from the industry.

a great deal of advertising among competing firms.

no product differentiation.

 

The sales of firms within a monopolistically competitive industry can depend upon:

intangibles like warrantees or return policies.

advertising for substitute products.

price.

 

The sales of firms within a monopolistically competitive industry can depend upon:

intangibles like warrantees or return policies.

advertising for substitute products.

price.

 

Suppose the monopolistic competitor faces costs and demand as depicted in the table below. Given the goal of maximizing profit, what level of output would the firm choose?

Q =

1

2

3

4

5

6

TR =

10

18

24

28

30

30

TC =

2

7

12

20

30

42

4

6

1

2

3

5

 

Profit is:

equal to [(price – average cost) x quantity]

maximized when marginal revenue is greater than marginal cost

increased when marginal revenue is greater than marginal cost

 

Given the level of demand below, what is the marginal revenue of the fifth unit of production?

Price

Quantity

25

1

22

2

18

3

15

4

12

5

$48

$12

$60

$0

 

 

 

 

 

 

Given the level of demand below, what is total revenue when the price is 18?

Price

Quantity

25

1

22

2

18

3

15

4

12

5

between $1-$25

$0

more than 50

between $26-$49

 

Using the graph below, if Q = 5, Total Cost = Description: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/Figures+3+and+4.png

70

90

30

Given the level of demand in the graph below, if Q = 5, total revenueDescription: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/Items+1+and+2.png

50

100

60

0

 

If the firm is producing at a quantity of output where marginal revenue is less than marginal cost, then,

the firm's perceived demand will shift to the right.

the firm should reduce production.

each marginal unit adds profit by bringing in less cost than its revenue.

 

In a monopolistically competitive market, the rule for maximizing profit is to set MR = MC, which means

price is equal to marginal revenue.

price is lower than marginal revenue.

price is higher than marginal revenue.

price is equal to marginal cost.

 

Assuming that the monopolistic competitor faces the demand and costs depicted below and finds the profit maximizing level of output, what will be the firm’s profit? Description: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/monopolistic-competition-with-profit.png

$64

$24

$48

$70

Assuming that the monopolistic competitor faces the demand and costs depicted below and finds the profit maximizing level of output, what will be the firm’s revenue? Description: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/monopolistic-competition-at-shutdown.png

$ 0 because the firm will shut down

$64

$80

$120

 

Within a monopolistically competitive industry, it would be expected that:

firms make a positive or negative economic profit in the short-run.

in the long-run, a typical firm’s price is greater than their average cost.

firms make a positive economic profit in the long-run.

in the short-run, an innovative firm’s price is greater than their average cost.

 

If a perfectly competitive market moved toward monopolistic competition, we might expect:

a smaller range of product differentiation, but a lower price.

a greater range of product innovation and a lower price.

less advertising.

a greater range of product differentiation, but a higher price.

 

In the framework of monopolistic competition, advertising works because it causes:

a steeper perceived demand curve.

perceived demand curve to shift to the left.

the steeper perceived demand curve to become flatter.

 

Effective advertising has what effect on product differentiation?

It has no effect on product differentiation.

It decreases product differentiation.

It increases product differentiation.

 

A monopolistically competitive industry does not display ________ in either the short-run, when firms are making ________, nor in the long-run, when firms are earning ________ .

allocative efficiency; economic losses; positive economic profits

productive efficiency; economic profits or losses; negative economic profits

allocative efficiency; economic profits and losses; zero economic profits

 

Perfect competition displays allocative efficiency because the social benefits of additional production, as measured by the price that people are willing to pay, are in balance with the ________ to society of that production.

total costs

marginal revenues

 

marginal costs

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Due By (Pacific Time) 10/31/2015 05:00 pm
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