QUESTION 34Monopolist competition and oligopoly are alike in thatOa the number of businesses is approximately the same in eachb. strong mutual interdependence exists among businesses in oachOc barriers to entry are significant to bothd.non-pnce competition is common to bothQUESTION 35If nominal GDP rises:O1.real GDP must also riseO2.real GDP must fall3. the price leel has fallen04. the price level has risen5.real GDP may either rise or fall QUESTION 30The price elasticity of demand indicatesOa the slope of the demand curveOb.how far business executives can stretch their fixed costsOc the extent to which consumers respond to a change in priceOd. the extent to which a demand curve shifts as income changesQUESTION 31A monopolistic competitor's marginal revenue curve:O a. coincides with the dermand curve and is parallel to the horizontal axisO b. is downward-sloping and coincides with the demand curveOt. is downward-sloping and lies above the demand curveCd. is downward-sloping and lies below the demand curve

QUESTION 34 Monopolist competition and oligopoly are alike in that Oa the number of businesses is approximately the same in each Ob. strong mutual interdependence exists among businesses in each Oc barriers to entry are significant to both d.non-price competition is common to both QUESTION 35 If nominal GDP rises: O1.real GDP must also rise O2.real GDP must fall O 3.the price level has fallen 4. the price level has risen O 5.real GDP may either rise or fall

QUESTION 34 Monopolist competition and oligopoly are alike in that Oa the number of businesses is approximately the same in each Ob. strong mutual interdependence exists among businesses in each Oc barriers to entry are significant to both d.non-price competition is common to both QUESTION 35 If nominal GDP rises: O1.real GDP must also rise O2.real GDP must fall O 3.the price level has fallen 4. the price level has risen O 5.real GDP may either rise or fall

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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24 If oligopolies compete hard against each other, which of the following will likely occur? A They will start acting like imperfect competitors. They will start acting like monopolistic competitors. The costs for all will be driven up. DO They will all experience zero profits.
QUESTION 38 Which of the following statements is true about monopolistically competitive firms? O Unlike perfectly competitive firms, monopolistically competitive firms are able to raise their prices without losing all of their customers. O Like perfectly competitive firms, monopolistically competitive firms make homogenous goods. Like perfectly competitive firms, monopolistically competitive firms maximise their profits by setting price equal to marginal cost. O Unlike perfectly competitive firms, monopolistically competitive firms face perfectly inelastic demand curves.
The figure to the right illustrates market demand for a monopoly along with its average total cost (ATC) curve. Is the monopoly a natural monopoly? The firm O A. is a natural monopoly because its demand curve is downward sloping. O B. is a natural monopoly because it has the potential to earn economic profits. OC. is not a natural monopoly because its demand curve is not infinitely elastic. O D. is not a natural monopoly because it experiences diseconomies of scale. OE E. is a natural monopoly because it can supply the entire market at lower average total cost than can two or more firms. Suppose 14 units of output are supplied in the market. How much lower is the average total cost of production for one firm compared to two firms? One firm can supply 14 units of output for $less per unit in average total cost than two firms. (Enter your response as an integer.) Price and cost (dollars per unit) 10.00- 9.00- 8.00- 7.00- 6.00- 5.00- 4.00- 3.00- 2.00- 1.00- 0.00- 0 2 4 6 ATC Demand 8 10…
The graph below shows a duopolistic market. The firms in this market produce and sell identical products. The graph below shows the market demand, a corresponding marginal revenue curve for the product, and an identical marginal cost curve for each firm. Assume both firms have the goal of maximising economic profit. If the two firms were to collude, what would be the total economic profit made by each firm? O O O $24 $6 $16 $8 Price ($) 10 9 8 7 $0 6 5 4 3 2 1 0 0 Insufficient information to determine economic profit of each firm. 1 2 3 4 MR 5 6 7 8 9 MC D 10 Quantity
Which of the following market types has all firms selling products so identical that buyers do not care from which firm they buy? Select one: O a. monopolistic competition O b. oligopoly O c. monopoly O d. perfect competition
This kind of firm operates in a small market with possibly 4 or 5 other firms, and sells a product that is the exact same product that other firms are selling. Monopolist O Oligopolist Perfect competitive firm Monopolistic competitive firm P 3 a 4 OO % 5 m 6 & 7 A 8 W P 9 s O 7
In monopolistic competition equilibrium with symmetric fırms, firms enter until each firm earns O zero economic profits because price equals average cot. O positive monopoly profits because it sells a differentiated product. O positive economic profits only if it engages in international trade O negative economic profits because of fixed costs.
What did Harvard economist Edward Chamberlin say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost? Select one: O a. Chamberlin argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs. O b. Chamberlin argued that these higher costs represent the wastefulness of this market structure. O c. In Chamberlin's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention. O d. According to Chamberlin, this cost difference represents the value consumers place on variety and having more choice.
QUESTION 4 If a monopolistically competitive market experiences economic loss in the short run then O a. some of the new firms will enter the market in the long-run, O b. some of the existing firms will exit the market in the long-run. O c. all the firms will stay in the long-run. O d. some firms will stay and some firms will leave the market in the long-run. QUESTION 5 One similarity between a monopoly firm and a monopolistically competitive firm is O both have downward sloping demand curve which is above the marginal revenue curve. O both have downward sloping demand curve which is below the marginal revenue curve. O that the demand curve for both are horizontal. O that the demand curve for both are vertical. QUESTION 6 A positive economic profits in the short-run of a monopolistically competitive market would O a. cause the market to become perfectly competitive in the long-run. O b. make no difference as no firms entering or exiting in the long-run. O. make some existing firms to…
Conceptually, which statement applies only to a market under monopolistic competition and not to a market under a monopoly? O A firm operating in the market maximizes profits where marginal revenue equal to marginal cost O If economic profits are being made, new firms will enter the market O Firms face a downward-sloping demand curve O A firm operating in the market can make positive economic profits in the short run O None of the other answers (i.e., all of the other answers apply to both market structures)
QUESTION 20 One key feature of a monopolistically competitive market is O a. that there are a lot of firms who sell similar goods but not identical. O b. that there are a few firms who sells the goods which are not identical. O . that there are a lot of firms selling identical goods. O d. that there are a few firms who sells the goods which are different.
6. Consider a duopoly in which inverse demand is given by P= 100-Q, where Pis the price and Q is aggregate output. The marginal cost of each firm is initially equal to 55 and there are no fixed costs. The firms compete by simultaneously setting quantities. (a) What is the equilibrium quantity of each firm, the equilibrium price and the profit of each firm? Now assume that one of the firms, firm 1, develops a new technology that reduces its own marginal cost to 25. (b) If firm 1 keeps this innovation for itself (so that the marginal cost of firm 2 is still 55), what will be the new equilibrium levels of output, price and profits of the two firms? What is the consumer surplus in the market? Do consumers benefit from the innovation?