Managerial Economics Questions
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A monopolistically competitive firm's demand for its product is equal to Q = 160 - P, and its MC curve is equal to MC = 20 + 2Q. Its TC curve is as follows: TC = 20Q + Q2 + 20.A. Its demand curve will become more elastic as it dominates the market more. B. Its losses will fall and eventually become a positive economic profitC. Its economic profits will decrease to zero D. Other firms will not enter or exit the industry
In a monopolistically competitive industry:A. To maximize profits, firms set MR=MC and people would be better off it output was reducedB. A firm maximizes profits when MR=MC yet P>MCC. Output could be increased without an increase in total costD. People would be better off if output was reduced
In monopolistic competition:A. Firms are more aware of their strategic independenceB. Firms earn large economic profits in the long runC. Each firm produces a product identical to that of every other firm in the industryD. Firms earn zero economic profits in the long run
Suppose a monopolistically competitive firm is making a profit but it can increase its profits by increasing profits by increasing output. Then it must be the case that at the current level of output: A. Marginal revenue is less than marginal costB. Price is less than marginal costC. Price is less than average total costD. Marginal revenue is greater than marginal cost
General Snacks is a typical firm in a market characterized by the model of monopolistic competition. Initially, the market is initially in the long-run equilibrium, and then there is an increase in demand for snacks. We expect thatA. In the long run, new firms will enter the market.B. Firms will leave the market in the long runC. There will be a short-run increase in the number of firms, but in the long run, the number of firms will return to original levelD. Firms will shut down, but they will not leave the industry in the long run.
Toby operates a small deli downtown. The deli industry is monopolistacally competitive. In the long run, Toby will produce where:A. Marginal revenue equals marginal costB. Price equals marginal revenueC. Price equals marginal costD. Price equals minimum average total cost
In which of the following situations does overt collusion exist?a. Smaller firms in an industry have an unspoken agreement to charge the same price at the largest firm.b. Competition among a large number of small firms generate a stable market pricec. Firms in an industry agree openly on price and output, and they jointly make other decisions aimed at achieving monopoly profits.d. Competition among a large number of small firms generates similar but slightly different prices.
Monopolistic competition within an industry results in:A. Less advertising than in perfect competitionB. Loss prices than in perfect competitionC. Overutilization of plantsD. Chronic excess capacity
Which of the following would make it difficult for oligopolists to collude?a. Thee are few firms in the market.b. There are few buyers in the marketc. The oligopolists havr similar costs of production.d. Oligopolists usually produce a homogeneous product
The profit-maximizing rule, expressed as ____, is adhered to by firms operating in a market that is ____.A. MC>MR; monopolistically competitive but not perfectly competitive B. MC=MR; both monopolistically competitive and perfectly competitive C. MC=MR; either monopolistically competitive or perfectly competitive, depending on the cost of productionD. MC>MR; perfectly competitive but not monopolistically competitive
In order to engage in price discrimination, a firm must bea. a price-takerb. a price-setter, and it must be able to identify consumers whose elasticities differ. c. a price-setterd. able to identify consumers who elasticies differ.
If a monpolist is producing a quantity that generates MC=P, then profit: a. is maximized b. can be increased by increasing productionc. if maximized only if MR=Pd. can be increased by decreasing production
A major application in the Sherman Antitrust Act was in ____ against ____. a. 1911; Standard Oilb. 1880; Ford Motor Companyc. 1889; Belld. 1889; Bell and Standard Oil
If the only two firms in an industry agree to fix the price at a given level, this is an example ofa. price extortionb. collusionc. satisfying demandd. price leadership
Which of the following does not describe OPEC?a. OPEC is the cartel that was responsible for the large increases include oil prices in the 1970's.b. OPEC is the name of the free-trade zone encompassing the Middle and other oil-producing nationsc. OPEC is Organization of Petroleum Exporting Countriesd. OPEC is an international cartel made up of 13 oil producing countries and two unofficial members
True or False? The fact that the price effect for an oligopolist is less than the price effect for a monopolist helps explain why firms are likely to cheat on a cartel agreement.
Non-price competition is more prevalent in an oligiopoly when there is (are):a. no product differentiationsb. a Nash equilibriumc. complex productsd. tacit collusions
Unwritten or unspoken understandings through which firms collude to restrict competition are calleda. overt collusionb. oligopolizationsc. cartelizationd. tacit collusion
An oligopoly may result from:a. increasing returns to scale in the industryb. low or no barriers to entryc. price-taking conditions for both buyers and sellersd. standardization of a product.
All of the following are examples of price discrimination except a. generally lower prices at Walmart than at Targetb. cheaper airfares if the traveler stays over a Saturdayc. discounts for senior citizens at the movies.d. discounts for families with young children at motels.