Homework Answers
19. Option C
Explanation: A monopolist is the single firm in the market and the price under a monopoly is higher as compared to that of a perfect competition, in which firms earn normal profit only. Also, output under perfect comeptition is higher than that of a monopoly.
20. Option A
Explanation: Friedman considered the governemnt to be a source of inefficiency.
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Assuming that firms maximize profits, how will the price and output policy of an unregulated...
15. Which of the following is a true statement about the difference between a price-taker firm and a competitive price-s...
15. Which of the following is a true statement about the difference between a price-taker firm and a competitive price-searcher firm in the long run (more than one answer is correct)? a. Both will sell their products at a price equal to average total cost, but only the price-searcher will produce at minimum average total cost. b. Both will sell their products at a price equal to marginal cost, and only the competitive price searcher will produce at minimum average...
1. A cartel is a group of firms that attempts to a. maximize joint revenue. b....
1. A cartel is a group of firms that attempts to a. maximize joint revenue. b. increase competition. c. behave independently. d. maximize joint profit. 2. If a firm's product loses brand loyalty, then the demand curve will: a. Become less price elastic. b. Shift to the right. c. Become more price elastic. d. Shift to the left. 3. Assume a monopoly confronts the same costs and demand as a competitive industry. In this case, the monopolist produces: a. Less...
A monopolistically competitive firm that wishes to maximize profits will choose to produce that level of output...
A monopolistically competitive firm that wishes to maximize profits will choose to produce that level of output where: Price of the good is equal to the marginal revenue of producing the last unit of the good Price of the good is equal to the marginal cost of producing the last unit of the good. Marginal revenue is equal to marginal cost. ATC is at the lowest point possible. An industry has eight firms with the following market shares: 5%, 20%,...
answer 14.1, extra detail for c depends on its ability to prevent buyers. pertectly competitive firms....
answer 14.1, extra detail for c
depends on its ability to prevent buyers. pertectly competitive firms. Durable goods s may be constrained by markets for used may opt for different levels of quality than olies (firms with diminishing avate naturs broad range of output levels). The mechanisms adopted can affect the regulated firm. . Governments often choose t average costs goods type A monopoly may be able to increase its profits further discrimination- that is, charging differ of buyers. The...
4. For a monopoly firm, marginal revenue (MR) is price (greater/less) than 5. To maximize profits,...
4. For a monopoly firm, marginal revenue (MR) is price (greater/less) than 5. To maximize profits, a monopoly firm picks the quantity at which revenue average revenue) equals {marginal cost/average cost) (marginal (Game Theory/Consumer Theory) is a method for analyzing strategic behavior of oligopoly firms 7. The entry of the second firm under monopolistic competition structure of market shifts the demand curve of the first firm to the (right left). D Focus ch De 9 W 11. Firms in a...
Consider a Stackelberg price-leader duopoly. There are two firms: A leader and a follower. Assume marginal...
Consider a Stackelberg price-leader duopoly. There are two firms: A leader and a follower. Assume marginal cost to be zero. The market demand is given as: p = a-bq: Show that: (a) The leaders profit-maximizing output q is the same as a monopolist in this market. But, the leaders profit and the market price are lower compared to monopoly. The followers output is one-half the output of the leader. (b)Leaders output is lower than when two firms behave as Cournot...
Perfect price discrimination a.increases profits to the firm. b.increases total surplus. c.decreases consumer surplus. d.All of...
Perfect price discrimination a.increases profits to the firm. b.increases total surplus. c.decreases consumer surplus. d.All of the above are correct. For a firm to price discriminate, a.it must be a natural monopoly. b.it must be regulated by the government. c.it must have some market power. d.consumers must tell the firm what they are willing to pay for the product. A monopoly's marginal cost will a.be less than its average fixed cost. b.be less than the price per unit of its...
QUESTION 22 All firms, regardless of market structure, maximize profits by choosing a level of output...
QUESTION 22 All firms, regardless of market structure, maximize profits by choosing a level of output such that: a. Marginal revenue equals marginal cost b. Marginal cost is zero c. Price equals marginal cost d. Marginal cost is minimized
An increase in demand would enable a monopolist to raise its price while reducing its output....
An increase in demand would enable a monopolist to raise its price while reducing its output. True False When the expansion of an industry and increased demand for labor results in higher wages, the market supply of the good that the industry produces would become A. upward sloping B. Downward sloping Св Vertical C D Horizontal E None of the above The total producer surplus is measured by: CA. A the area between supply and demand curves. B. the difference...
48. Which statement explains why free markets fail to produce public goods? Firms do not want...
48. Which statement explains why free markets fail to produce public goods? Firms do not want to produce the good because they fear competition will drive the price down below costs. Consumers do not want to buy the good because the price is higher than the value of benefits they would receive. ° Consumers do not want to buy the product because each hopes that someone else will buy it and then all consumers will be able to have the...
A monopolistically competitive firm that wishes to maximize profits will choose to produce that level of output where: Price of the good is equal to the marginal revenue of producing the last unit of the good Price of the good is equal to the marginal cost of producing the last unit of the good. Marginal revenue is equal to marginal cost. ATC is at the lowest point possible. An industry has eight firms with the following market shares: 5%, 20%,...
answer 14.1, extra detail for c
depends on its ability to prevent buyers. pertectly competitive firms. Durable goods s may be constrained by markets for used may opt for different levels of quality than olies (firms with diminishing avate naturs broad range of output levels). The mechanisms adopted can affect the regulated firm. . Governments often choose t average costs goods type A monopoly may be able to increase its profits further discrimination- that is, charging differ of buyers. The...
4. For a monopoly firm, marginal revenue (MR) is price (greater/less) than 5. To maximize profits, a monopoly firm picks the quantity at which revenue average revenue) equals {marginal cost/average cost) (marginal (Game Theory/Consumer Theory) is a method for analyzing strategic behavior of oligopoly firms 7. The entry of the second firm under monopolistic competition structure of market shifts the demand curve of the first firm to the (right left). D Focus ch De 9 W 11. Firms in a...
Perfect price discrimination a.increases profits to the firm. b.increases total surplus. c.decreases consumer surplus. d.All of the above are correct. For a firm to price discriminate, a.it must be a natural monopoly. b.it must be regulated by the government. c.it must have some market power. d.consumers must tell the firm what they are willing to pay for the product. A monopoly's marginal cost will a.be less than its average fixed cost. b.be less than the price per unit of its...
QUESTION 22 All firms, regardless of market structure, maximize profits by choosing a level of output such that: a. Marginal revenue equals marginal cost b. Marginal cost is zero c. Price equals marginal cost d. Marginal cost is minimized
An increase in demand would enable a monopolist to raise its price while reducing its output. True False When the expansion of an industry and increased demand for labor results in higher wages, the market supply of the good that the industry produces would become A. upward sloping B. Downward sloping Св Vertical C D Horizontal E None of the above The total producer surplus is measured by: CA. A the area between supply and demand curves. B. the difference...
48. Which statement explains why free markets fail to produce public goods? Firms do not want to produce the good because they fear competition will drive the price down below costs. Consumers do not want to buy the good because the price is higher than the value of benefits they would receive. ° Consumers do not want to buy the product because each hopes that someone else will buy it and then all consumers will be able to have the...
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