Firms with market power a. face downward sloping average cost curves. b. face downward sloping marginal...
Firms with market power
a. face downward sloping average cost curves.
b. face downward sloping marginal cost curves.
c. produce where P = MR = MC.
d. maximize profit but fail to maximize social surplus.
Homework Answers
OPTION D IS CORRECT
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Firms with market power
a. face downward sloping average cost curves.
b. face downward sloping marginal...
Increased specialization in large firms might lead to: O A. upward-sloping marginal cost curves. O B....
Increased specialization in large firms might lead to: O A. upward-sloping marginal cost curves. O B. horizontal marginal cost curves O C. downward -sloping long-run average cost curves. O D. upward-sloping long-run average cost curves.
2. Consider a downward-sloping market demand and an upward-sloping marginal cost. For each of the following...
2. Consider a downward-sloping market demand and an upward-sloping marginal cost. For each of the following situations, show the Social Marginal Benefit and Social Marginal Cost curves and explain whether the presence of the externality leads to a monopoly equilibrium with too much or too little production relative to the socially optimal outcome. (a) A negative externality associated with production (b) A negative externality associated with consumption (c) A positive externality associated with consumption.
Since firms that are not in perfect competition face downward-sloping demand curves, we know that to...
Since firms that are not in perfect competition face downward-sloping demand curves, we know that to increase sales quantity they must lower prices. As a result: Group of answer choices Product Price is less than Marginal Revenue Price and Revenue are no longer related Price and Revenue are equal to each other Marginal Revenue is less than Product Price
identify all types of market competition where firms face a downward sloping demand curve a) perfect...
identify all types of market competition where firms face a downward sloping demand curve a) perfect competition b) monopolistic competition c) oligopoly d) monopoly
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...
The graph to the right shows the Marginal Cost (MC), Average Total Cost (ATC), and Marginal...
The graph to the right shows the Marginal Cost (MC), Average Total Cost (ATC), and Marginal Revenue (MR) curves for a perfectly (or purely) competitive firm. Note that the Demand (D) curve is the same as the MR curve for such a MR/MC ($) firm. Assume that the cost curves here are representative of other firms in the industry. Given the current price, this firm will: earn a positive profit. earn a negative profit. earn zero economic profit. In the...
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...
The curves show the marginal cost (MC), average variable cost (AVC) and average total cost (ATC)...
The curves show the marginal cost (MC), average variable cost (AVC) and average total cost (ATC) curves for a firm that sell mid-range cars in a competitive market. Use the area tool to draw the area representing the firms profit or loss, if the firm produce 6000 cars. Your answer should be a rectangle drawn with four corners
When the firm produce 6000 cars it earn a profit or suffer a loss of ----- million
The long-run market supply curve is Choose one :A. downward sloping. B. vertical at the profit-maximizing...
The long-run market supply curve is
Choose one
:A. downward sloping.
B. vertical at the profit-maximizing output level.
C. horizontal at the market price.
D. upward sloping.
Price MC ATC Price P= min. ATC MR -------- 9 Firm's quantity (9) (a) Individual Firm Market quantity (Q) (b) Market We were unable to transcribe this image
Suppose a firm has market power and faces a downward-sloping demand curve for its product, and...
Suppose a firm has market power and faces a downward-sloping demand curve for its product, and its marginal cost curve is upward sloping. If the firm reduces its price, then A. producer surplus increases due to new buyers, but the producer surplus from existing customers declines due to the lower price. B. the sum of producer and consumer surplus remains the same, but surplus value is transferred from the producer to consumers. C. the change in producer surplus is transferred...
Increased specialization in large firms might lead to: O A. upward-sloping marginal cost curves. O B. horizontal marginal cost curves O C. downward -sloping long-run average cost curves. O D. upward-sloping long-run average cost curves.
2. Consider a downward-sloping market demand and an upward-sloping marginal cost. For each of the following situations, show the Social Marginal Benefit and Social Marginal Cost curves and explain whether the presence of the externality leads to a monopoly equilibrium with too much or too little production relative to the socially optimal outcome. (a) A negative externality associated with production (b) A negative externality associated with consumption (c) A positive externality associated with consumption.
The graph to the right shows the Marginal Cost (MC), Average Total Cost (ATC), and Marginal Revenue (MR) curves for a perfectly (or purely) competitive firm. Note that the Demand (D) curve is the same as the MR curve for such a MR/MC ($) firm. Assume that the cost curves here are representative of other firms in the industry. Given the current price, this firm will: earn a positive profit. earn a negative profit. earn zero economic profit. In the...
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...
The curves show the marginal cost (MC), average variable cost (AVC) and average total cost (ATC) curves for a firm that sell mid-range cars in a competitive market. Use the area tool to draw the area representing the firms profit or loss, if the firm produce 6000 cars. Your answer should be a rectangle drawn with four corners
When the firm produce 6000 cars it earn a profit or suffer a loss of ----- million
The long-run market supply curve is
Choose one
:A. downward sloping.
B. vertical at the profit-maximizing output level.
C. horizontal at the market price.
D. upward sloping.
Price MC ATC Price P= min. ATC MR -------- 9 Firm's quantity (9) (a) Individual Firm Market quantity (Q) (b) Market We were unable to transcribe this image
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