Answered: 11. In which market structure will a…

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11. In which market structure will a firm choose to stay in business (i.e. not shut down) when P

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

11. In which market structure will a firm choose to stay in business (i.e. not shut down) when
P<AVC at the output level where MR-MC?
a) perfect competition
b) monopoly
c) monopolistic competition
d) none of the above. All firms will shut down if P<AVC at the output where MR-MC.
12. A concentration ratio measures
a) the average size of the firms in an industry
b) the sales of the three largest firms in the industry minus the costs of these three
largest firms.
c) the excess capacity found in a particular oligopolistic industry.
d) the share of total industry output accounted for by the largest firms in the industry.
MC,
MC,
B
MC,
D,
MR
Demand
F
G
Quantity (units)
13. In the above graph of non-collusive oligopoly, if the Marginal Cost curve shifts from
MC1 to MC3, there will be:
a) No change in price or output.
b) A decrease in price and no change in output.
c) A decrease in price and an increase in output.
d) No change in price and an increase in output.
Price or Cost (per unit)

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