Under monopolistic competition, product differentiation means that each firm: Produces identical products Can set any price without losing customers Has a perfectly elastic demand curve Faces a downward sloping demand curve

Faces a downward sloping demand curve

When marginal cost is below average variable cost, what must be happening to the average variable cost? Average variable cost is at its minimum Average variable cost is constant Average variable cost is falling Average variable cost is rising

Average variable cost is falling

In a perfectly competitive market for haircuts, if a decrease in population reduces demand in the short run, what happens to the market price and output of a typical firm? Price will fall; output will rise Price will rise; output will fall Price will fall; output will fall Price will rise; output will rise

Price will fall; output will fall

In a perfectly competitive market for haircuts, if an increase in population raises demand in the short run, what is likely to happen to the typical firm's profit? The firm will break even The firm's profit will remain unchanged The firm is likely to incur a loss The firm is likely to begin earning an economic profit

The firm is likely to begin earning an economic profit

What does a downward sloping demand curve ensure in terms of price and marginal revenue? Price is unrelated to marginal revenue Price is less than marginal revenue (P MR)

Price is greater than marginal revenue (P > MR)

How does a monopolist respond to an increase in marginal cost in terms of price and output? Increasing price, increasing output Increasing price, decreasing output Decreasing price, decreasing output Decreasing price, increasing output

Increasing price, decreasing output

If two firms are identical except that one has more capital, how will the total product curve for the firm with more capital compare? It will lie above the total product curve for the firm with less capital It will lie below the total product curve for the firm with less capital It will be identical to the total product curve for the firm with less capital It will intersect the total product curve for the firm with less capital

It will lie above the total product curve for the firm with less capital

Micro (monopolistic)

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Economics - Managerial Economics

michael1tekrzp Created by 10 mon ago

Cards in this deck(21)

In a perfectly competitive market, if a firm is producing a quantity where price equals marginal cost (P=MC), what can be said about the firm's profit?

Under monopolistic competition, product differentiation means that each firm:

If a perfectly competitive firm increases production from 10 units to 11 units and the market price is $20 per unit, what is the total revenue for 11 units?

When marginal cost is below average variable cost, what must be happening to the average variable cost?

In a perfectly competitive market for haircuts, if a decrease in population reduces demand in the short run, what happens to the market price and output of a typical firm?

In a perfectly competitive market for haircuts, if an increase in population raises demand in the short run, what is likely to happen to the typical firm's profit?

What does a downward sloping demand curve ensure in terms of price and marginal revenue?

How does a monopolist respond to an increase in marginal cost in terms of price and output?

What is the field of law called that attempts to limit the ability of oligopolists to collude and restrict competition?

If two firms are identical except that one has more capital, how will the total product curve for the firm with more capital compare?

Which scenario best describes an oligopolistic industry?

What is the main characteristic that distinguishes monopolistic competition from perfect competition?

In a perfectly competitive market in long-run equilibrium, which of the following must be true?

If a monopolist is producing a quantity that generates MC=MR, what can be said about the monopolist's profit?

The _____ demand curve for a firm operating in a monopolistically competitive market _____ from the horizontal demand curve facing a perfectly competitive firm.

The average total cost curve has a U-shape because the _____ effect is dominant at low levels of output, and the _____ effect is dominant at high levels of output.

Diminishing returns are a reason why:

Because monopoly firms are price setters, they can sell more only by:

What is the cost called that does not depend on the quantity of output produced?

If a firm acts to maximize profit, the firm will earn profit equal to:

If this firm's marginal revenue curve is MR1, then this firm will profit maximize by producing _____ units of output and its economic profit will be _____.

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