# Figure: Computing Monopoly Profit

Size: px
Start display at page:

Transcription

1 Name: Date: 1. Compared to perfect competition: A) monopoly produces more at a lower price. B) monopoly produces where MR > MC, and a perfectly competitively firm produces where P = MC. C) monopoly may have economic profits in the long run, but in perfect competition in the long run economic profits are zero. D) perfect competition may have economic profits in the long run, but in monopoly the long run economic profits are zero. 2. The two theoretical extremes of the market structure spectrum are occupied on one end by perfect competition and on the other end by: A) monopoly. B) duopoly. C) oligopoly. D) monopolistic competition. 3. Most electric, gas, and water companies are examples of: A) unregulated monopolies. B) natural monopolies. C) restricted-input monopolies. D) sunk-cost monopolies. 4. Which of the following is true? A) Profit-maximizing behavior occurs only in perfectly competitive markets. B) Additional units of a good should be produced as long as MR < MC. C) The profit-maximizing solution occurs where MR = MC. D) The profit-maximizing solution occurs where MR > MC. 5. A monopoly responds to an increase in demand by price and output. A) increasing; decreasing B) increasing; increasing C) decreasing; increasing D) decreasing; decreasing Page 1

2 6. A monopoly responds to a decrease in demand by price and output. A) increasing; decreasing B) increasing; increasing C) decreasing, increasing D) decreasing; decreasing 7. A monopoly responds to an increase in marginal cost by price and output. A) increasing; decreasing B) increasing; increasing C) decreasing; increasing D) decreasing; decreasing Use the following to answer questions 8-11: Figure: Computing Monopoly Profit 8. (Figure: Computing Monopoly Profit) The profit-maximizing price is and will generate total economic profit of. A) P2; EF B) P3; the rectangle P1P2FG C) P3; the rectangle P2P3EF D) P3; EF Page 2

3 9. (Figure: Computing Monopoly Profit) Producing at point N would: A) result in MR = MC. B) result in positive economic profits. C) never be profit-maximizing, since at this output MR < 0 and MC > 0. D) result in the firm breaking even. 10. (Figure: Computing Monopoly Profit) At the profit-maximizing output, total cost is: A) P10Q1G B) P30Q1E C) P20Q1F D) FQ2 11. (Figure: Computing Monopoly Profit) In order to obtain maximum profits, the monopoly should produce the output determined by point. A) G B) N C) H D) K Use the following to answer questions 12-13: Figure: Monopoly Model Page 3

4 12. (Figure: Monopoly Model) The profit-maximizing quantity is the one indicated by the distance: A) W. B) J. C) K. D) L. 13. (Figure: Monopoly Model) The profit-maximizing price is the one indicated by: A) Z. B) P. C) E. D) F. 14. In the short run, a monopoly will stop producing if: A) P < ATC. B) P < AVC. C) P > MR. D) P > ATC. 15. One government policy for dealing with a natural monopoly is to: A) impose a price floor to eliminate the deadweight loss. B) impose a price ceiling to eliminate any economic profit. C) break it up into smaller firms. D) impose fines on the monopolist. 16. Compared to perfect competition: A) monopoly produces more at a lower price. B) monopoly produces where MR > MC, and a perfectly competitively firm produces where P = MC. C) monopoly may have economic profits in the long run, but in perfect competition, in the long run, economic profits are larger than in monopoly. D) monopoly produces less at a higher price. 17. is the practice of selling at different prices in different markets, without corresponding differences in costs. A) price discrimination; the same product B) privatizing; the same product C) monopolizing; similar products D) price fixing; different products Page 4

5 18. An oligopoly is characterized as an industry in which: A) there are few firms, each producing a differentiated or similar product. B) there are many firms, each producing a similar product. C) all market participants are price-takers. D) only one firm produces a very differentiated product. 19. A monopolistically competitive industry is made up of: A) a few firms, each producing a very differentiated good. B) one firm that produces a very standardized good. C) market participants who are all price-takers. D) many firms producing a differentiated product. 20. If a monopoly market structure was turned into a perfectly competitive one, one would find that price would and output would. A) fall; fall B) fall; increase C) increase; increase D) increase; fall 21. In an oligopoly: A) there are many sellers. B) there are no barriers to entry. C) firms recognize their interdependence. D) total surplus is maximized. 22. Oligopoly is a market structure characterized by: A) independence in decision making. B) a horizontal demand curve. C) a small number of interdependent firms. D) relatively easy entry and exit. 23. The sum of the squared market shares of each firm in an industry is the: A) concentration ratio. B) employment rate. C) Herfindahl-Hirschman Index. D) market number. Page 5

6 24. The Herfindahl-Hirschman Index is a measure of concentration found by: A) squaring the percentage share of each firm in the industry. B) squaring the percentage share of each firm in the industry and then summing the squared market shares. C) summing the percentage shares of each firm in the industry. D) squaring the sums of the concentrations ratios found in an industry survey of the largest four and largest eight firms. 25. The largest HHI possible is in the case of and the index is. A) monopoly; 10 B) monopoly; 10,000 C) monopoly; 100,000 D) oligopoly; 100, The HHI for where have (has) of the market is. A) monopolistic competition; four firms each; 25%; 10,000 B) oligopoly; three firms each; 50%; 5,000 C) oligopoly; two firms each; 50%; 5,000 D) monopoly; one firm; 100%; 100, Gary's Gas and Frank's Fuel are the only two providers of gasoline in Smalltown. Gary and Frank decide to form a cartel to raise the price of gasoline. The total industry profits are highest when and Gary's profits are highest when. A) neither firm cheats on the agreement; neither firm cheats on the agreement B) neither firm cheats on the agreement; Gary cheats on the agreement and Frank does not cheat C) both firms cheat on the agreement; Gary cheats on the agreement and Frank does not cheat D) both Gary and Frank cheat on the agreement; both Gary and Frank cheat on the agreement Page 6

7 Use the following to answer questions 28-29: Figure: Payoff Matrix I for Blue Spring and Purple Rain 28. (Figure: Payoff Matrix I for Blue Spring and Purple Rain) The figure shows the payoff matrix for two producers of bottled water, Blue Spring and Purple Rain. The Nash equilibrium in the figure is reached when: A) both firms charge a high price. B) both firms charge a low price. C) Blue Spring charges a high price and Purple Rain charges a low price. D) Purple Rain charges a high price and Blue Spring charges a low price. 29. (Figure: Payoff Matrix I for Blue Spring and Purple Rain) Each has two strategies available to it: a high price and a low price. The dominant strategy for Purple Rain is to: A) always charge a low price. B) always charge a high price. C) always adopt the same strategy as Blue Spring. D) Purple Rain does not have a dominant strategy. Page 7

8 Use the following to answer question 30: Figure: Pricing Strategy in Cable TV Market I 30. (Figure: Pricing Strategy in Cable TV Market I) In the figure, the dominant strategy for CableNorth: A) is to advertise. B) is to not advertise. C) is to do whatever CableSouth does. D) does not exist. 31. A well-known example of an international cartel is: A) Japan. B) OPEC. C) Exxon. D) General Motors. 32. If the Herfindahl-Hirschman Index (HHI) for an industry is 900, this market is considered: A) a strongly competitive market. B) a somewhat competitive market. C) oligopolistic. D) monopolistic. Page 8

9 33. Monopolistic competition is an industry characterized by a: A) small number of firms producing identical products, with barriers to entry for firms. B) small number of firms producing similar products, with relatively easy entry for firms. C) large number of firms producing similar products, with relatively easy entry for firms. D) large number of firms producing identical products, with relatively easy entry for firms. Use the following to answer questions 34-35: Figure: Monopolistic Competition I 34. (Figure: Monopolistic Competition I) Which of the panels in the figure shows a monopolistic competitor earning a loss in the short run? A) Panel a B) Panel b C) Panel c D) None of the panels show a loss in the short run. 35. (Figure: Monopolistic Competition I) Which of the panels in the figure shows a monopolistic competitor earning a profit in the short run? A) Panel a B) Panel b C) Panel c D) Panels a and c Page 9

10 Use the following to answer question 36: Figure: Monopolistic Competition II 36. (Figure: Monopolistic Competition II) The accompanying figure shows the demand, marginal revenue, marginal cost, and average total cost curves for Pat's Pizza Parlor, a monopolistic competitor in the food-to-go industry. The optimal level of output for Pat's Pizza Parlor is and the profit-maximizing price is. A) 350; \$3.50 B) 350; \$7.00 C) 590; \$5.60 D) 500; \$ The profit-maximizing rule or is adhered to by firms under. A) MC > MR; monopolistic competition, but not perfect competition B) MC = MR; both monopolistic competition and perfect competition C) MC > MR; perfect competition, but not monopolistic competition D) MC = MR; either monopolistic competition or perfect competition, depending on the costs of production 38. Monopolistic competition within an industry results in: A) overutilization of plants. B) chronic excess capacity. C) less advertising than in perfect competition. D) lower prices than in perfect competition. Page 10

11 39. The restaurant industry is characterized by excess capacity. This means that: A) restaurants are producing more than their profit-maximizing level. B) the profit-maximizing level is less than the level that minimizes average total costs. C) the restaurants are producing less than their profit-maximizing level. D) the quantity of restaurant meals supplied exceeds the quantity of restaurant meals demanded. 40. Critics of advertising argue that it: A) tends to make markets more perfect. B) leads to low-cost mass production. C) results in higher prices to consumers. D) encourages competition through new-product advertising. Page 11

12 Answer Key 1. C 2. A 3. B 4. C 5. B 6. D 7. A 8. C 9. C 10. C 11. A 12. B 13. B 14. B 15. B 16. D 17. A 18. A 19. D 20. B 21. C 22. C 23. C 24. B 25. B 26. C 27. B 28. B 29. A 30. D 31. B 32. A 33. C 34. B 35. A 36. B 37. B 38. B 39. B 40. C Page 12

CH 15-16 short answer study questions Answer Section ESSAY 1. ANS: There are a large number firms; each produces a slightly different product; firms compete on price, quality and marketing; and firms are

### Unit 13 AP Economics - Practice

DO NOT WRITE ON THIS TEST! Unit 13 AP Economics - Practice Multiple Choice Identify the choice that best completes the statement or answers the question. 1. A natural monopoly exists whenever a single

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Micro - HW 4 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In central Florida during the spring, strawberry growers are price takers. The reason

### Unit 6 Perfect Competition and Monopoly - Practice Problems

Unit 6 Perfect Competition and Monopoly - Practice Problems Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One characteristic of a perfectly competitive

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

PRACTICE FOR PERFECT COMPETITION Fatma Nur Karaman MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) What is the difference between perfect competition

### Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet. Class Day/Time

1 Principles of Microeconomics Assignment 8 (Chapter 10) Answer Sheet Name Class Day/Time Questions of this homework are in the next few pages. Please find the answer of the questions and fill in the blanks

### AP Microeconomics Review Session #3 Key Terms & Concepts

The Firm, Profit, and the Costs of Production 1. Explicit vs. implicit costs 2. Short-run vs. long-run decisions 3. Fixed inputs vs. variable inputs 4. Short-run production measures: be able to calculate/graph

### Eco201 Review questions for chapters Prof. Bill Even ====QUESTIONS FOR CHAPTER 13=============================

Eco201 Review questions for chapters 13-15 Prof. Bill Even ====QUESTIONS FOR CHAPTER 13============================= 1) A monopoly has two key features, which are. A) barriers to entry and close substitutes

### 2013 sample MC CH 15. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

Class: Date: 2013 sample MC CH 15 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Monopolistic competition is identified by a. many firms producing a slightly

### 2007 Thomson South-Western

Monopolistic Competition Characteristics: Many sellers Product differentiation Free entry and exit In the long run, profits are driven to zero Firms have some control over price What does the costs graph

### Monopolistic Competition

Monopolistic Competition CHAPTER16 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Describe and identify monopolistic competition. 2 Explain how

### UNIVERSITY OF VICTORIA EXAMINATIONS APRIL 2006 ECON 103

UNIVERSITY OF VICTORIA EXAMINATIONS APRIL 2006 ECON 103 NAME: INSTRUCTOR: STUDENT NO: SECTION: DURATION: TWO (2) HOURS TO BE ANSWERED ON THE PAPER AND ON N.C.S. ANSWER SHEETS STUDENTS MUST COUNT THE NUMBER

### Slides and Images, Worth Publishers Inc. 8-1

Perfect Competition Michael J. Murray Slides and Images, Worth Publishers Inc. 8-1 Market Structure Analysis By observing a few industry characteristics, we can predict pricing and output behavior of the

### Chapter 15 Oligopoly

Goldwasser AP Microeconomics Chapter 15 Oligopoly BEFORE YOU READ THE CHAPTER Summary This chapter explores oligopoly, a market structure characterized by a few firms producing a product that mayor may

### The above Figure 1 shows the demand and cost curves facing a monopolist.

Practice 13&14 1) The key characteristics of a monopolistically competitive market structure include A) few sellers. B) sellers selling similar but differentiated products. C) high barriers to entry. D)

### Quiz #5 Week 04/12/2009 to 04/18/2009

Quiz #5 Week 04/12/2009 to 04/18/2009 You have 30 minutes to answer the following 17 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your

### sample test 3 - spring 2013

sample test 3 - spring 2013 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. A natural monopoly occurs when a. the product is sold in its

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

AUBG, Fall 2015, Principles Micro with P. Stankov, Sample MT2 NOTE: The actual no. of questions on the actual MT will be 30, each for 0.67 grade points. MULTIPLE CHOICE. Choose the one alternative that

### Monopolistic Competition. Chapter 17

Monopolistic Competition Chapter 17 The Four Types of Market Structure Number of Firms? Many firms One firm Few firms Differentiated products Type of Products? Identical products Monopoly Oligopoly Monopolistic

### Monopoly and How It Arises

Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists In which there is one supplier that is protected from competition by a barrier preventing

### Exam #2 Time: 1h 15m Date: 10 July Instructor: Brian B. Young. Multiple Choice. 2 points each

Economics 212 Microeconomic Principles Exam #2 Time: 1h 15m Date: 10 July 2013 Name The value of this exam is 100 points. Instructor: Brian B. Young Please show your work where appropriate! Multiple Choice

### Principles of Microeconomics Module 5.1. Understanding Profit

Principles of Microeconomics Module 5.1 Understanding Profit 180 Production Choices of Firms All firms have one goal in mind: MAX PROFITS PROFITS = TOTAL REVENUE TOTAL COST Two ways to reach this goal:

### Chapter 14 Oligopoly and Monopoly

Economics 6 th edition 1 Chapter 14 Oligopoly and Monopoly Modified by Yulin Hou For Principles of Microeconomics Florida International University Fall 2017 Oligopoly: a very different market structure

### ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3C

ECON 21 (Summer 216 Sections 1 & 11) Exam #3C Multiple Choice Questions: (3 points each) 1. I am taking of the exam. C. Version C 2. is a market structure in which there is one single seller of a unique

### ECON 2100 (Summer 2016 Sections 10 & 11) Exam #3D

ECON 21 (Summer 216 Sections 1 & 11) Exam #3D Multiple Choice Questions: (3 points each) 1. I am taking of the exam. D. Version D 2. is a market structure in which there is one single seller of a unique

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Review 10-14-15 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1. The four-firm concentration ratio equals the percentage of the value of accounted

### Three Rules and Four Models

Three Rules and Four Models Three Rules: How to find the profit maximizing quantity: A firm will maximize its profit (or minimize its losses) by producing that output at which marginal revenue and marginal

### Three Rules and Four Models

Three Rules and Four Models Three Rules: How to find the profit maximizing quantity: A firm will maximize its profit (or minimize its losses) by producing that output at which marginal revenue and marginal

### ECON December 4, 2008 Exam 3

Name Portion of ID# Multiple Choice: Identify the letter of the choice that best completes the statement or answers the question. 1. A fundamental source of monopoly market power arises from a. perfectly

### Sample Multiple-Choice Questions

E03 3 Microeconomics Summative Exam SAMPLE QUESTIONS Sample Multiple-Choice Questions Circle the letter of each correct answer 1 True statements about the theory of the firm in the short run and long run

### Use the following to answer question 4:

Homework Chapter 11: Name: Due Date: Wednesday, December 4 at the beginning of class. Please mark your answers on a Scantron. It is late if your Scantron is not complete when I ask for it at 9:35. Get

### 4. Which of the following statements about marginal revenue for a perfectly competitive firm is incorrect? A) TR

Name: Date: 1. Which of the following will not be true of a perfectly competitive market? A) Buyers and sellers will have an imperceptible effect on the market. B) Firms can freely enter and exit the market.

### Market Structure & Imperfect Competition

In the Name of God Sharif University of Technology Graduate School of Management and Economics Microeconomics (for MBA students) 44111 (1393-94 1 st term) - Group 2 Dr. S. Farshad Fatemi Market Structure

### Econ 2113: Principles of Microeconomics. Spring 2009 ECU

Econ 2113: Principles of Microeconomics Spring 2009 ECU Chapter 12 Monopoly Market Power Market power is the ability to influence the market, and in particular the market price, by influencing the total

### CH 13. Name: Class: Date: Multiple Choice Identify the choice that best completes the statement or answers the question.

Class: Date: CH 13 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One requirement for an industry to be perfectly competitive is that a. sellers and buyers

### 29/02/2016. Market structure II- Other types of imperfect competition. What Is Monopolistic Competition? OTHER TYPES OF IMPERFECT COMPETITION

Market structure II- Other types of imperfect competition OTHER TYPES OF IMPERFECT COMPETITION Characteristics of Monopolistic Competition Monopolistic competition is a market structure in which many firms

### Eco201 Review Outline for Final Exam, Fall 2013, Prof. Bill Even

Note: The outline is intended to provide the student with a list of the major topics that will be on the final exam. The instructor is not limited to questions that fit into one of these precise categories,

### Chapter 6. Competition

Chapter 6 Competition Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 1-1 Chapter 6 The goal of this

### Many sellers: There are many firms competing for the same group of customers.

Microeconomics 2 Chapter 16 Monopolistic Competition 16-1 Between monopoly and perfect Competition One type of imperfectly competitive market is an oligopoly, a market with only a few sellers, each offering

### ECON 2100 (Summer 2012 Sections 07 and 08) Exam #3A

ECON 21 (Summer 212 Sections 7 and 8) Exam #3A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. Excess Capacity refers to the A. quantity of output at which Average

### ECON111 Sample Questions. 1.) Please fill in the table below for a perfect competetive firm.

ECON111 Sample Questions 1.) Please fill in the table below for a perfect competetive firm. Q P TC MC FC VC AFC AVC ATC TR MR 0-220 10 40 5 7 20 10 85 20 400 1000 20 100 24 a) Calculate profit at each

### MIDTERM II. GROUP A Instructions: December 18, 2013

EC101 Sections 03 Fall 2013 NAME: ID #: SECTION: MIDTERM II December 18, 2013 GROUP A Instructions: You have 60 minutes to complete the exam. There will be no extensions. The exam consists of 30 multiple

### MICROECONOMICS - CLUTCH CH PERFECT COMPETITION.

!! www.clutchprep.com CONCEPT: THE FOUR MARKET MODELS Market structure describes the environment in which a firm operates, determined by the Perfect Competition Monopolistic Competition Oligopoly Monopoly

### Eco201 Review Outline for Final Exam, Fall 2018, Prof. Bill Even

Note: The outline is intended to provide the student with a list of the major topics that will be on the final exam. The instructor is not limited to questions that fit into one of these precise categories,

### Textbook Media Press. CH 12 Taylor: Principles of Economics 3e 1

CH 12 Taylor: Principles of Economics 3e 1 Monopolistic Competition and Differentiated Products Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated

### 1. Why is utility subjective? 2. What are inferior options? 3. Suppose the price of A is 1, the price of B is 2 and the price of C is 1.

Study Questions for Chapters 7-11 Chapter 7 1. Why is utility subjective? 2. What are inferior options? 3. Suppose the price of A is 1, the price of B is 2 and the price of C is 1.50 a. Complete the following

### FINALTERM EXAMINATION FALL 2006

FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.

### ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3C

ECON 21 (Summer 215 Sections 7 & 8) Exam #3C Multiple Choice Questions: (3 points each) 1. I am taking of the exam. C. Version C 2. is a market structure in which there is one single seller of a unique

### INTRODUCTION ECONOMIC PROFITS

INTRODUCTION This chapter addresses the following key questions: What are profits? What are the unique characteristics of competitive firms? How much output will a competitive firm produce? Chapter 7 THE

### ECON 101 KONG Midterm 2 CMP Review Session. Presented by Benji Huang

ECON 101 KONG Midterm 2 CMP Review Session Presented by Benji Huang Chapter 5 Efficiency and Equity Benefit, Cost, Surplus Consumers (1) A consumer benefits from the consumption of a product this benefit

### ECON 251 Exam 2 Pink. Fall 2012

ECON 251 Exam 2 Pink Use the table below to answer the following four questions The table below shows Harry s total utility from consuming beer and wine. The price of beer is \$2 per bottle. The price of

### AP Microeconomics. Content Skills Learning Targets Assessment Resources & Technology

St. Michael Albertville High School Teacher: Matthew Rooker AP Microeconomics October 2014 Content Skills Learning Targets Assessment Resources & Technology November 2014 Content Skills Learning Targets

### COMPETITION AND MARKETS BEFORE YOU BEGIN. Market Structures. Looking at the Chapter. Date Period. Chapter

COMPETITION AND MARKETS BEFORE YOU BEGIN Looking at the Fill in the blank spaces with the missing words. Market Structures Perfect Competition sellers product No barriers to entry Price taker Produce where

### Monopoly and How It Arises

13 MONOPOLY Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists If a good has a close substitute, even if it is produced by only one

### Microeconomics Unit 2 The Nature and Function of Product Markets

Microeconomics Unit 2 The Nature and Function of Product Markets Characteristics: Large number of sellers Small market share No collusion which means? Producer s act independently Differentiated products

### Economics 101 Midterm Exam #2. April 9, Instructions

Economics 101 Spring 2009 Professor Wallace Economics 101 Midterm Exam #2 April 9, 2009 Instructions Do not open the exam until you are instructed to begin. You will need a #2 lead pencil. If you do not

### Unit 4: Imperfect Competition

Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique

### Microeconomics (Spring 2015) Final Exam Study Guide

Microeconomics (Spring 2015) Final Exam Study Guide 1 Note: Below is a list of study questions for the upcoming Part 1 of the final exam, June 10 (Ch. 13, 14, 15, and 17). Please answer them (all of them

### Market Power at Work: Computer Market Revisited

Monopolies Part II Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity. Nancy Pearcey Market Power at Work: Computer Market

### MARKETS. Part Review. Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2

Part Review 4 FIRMS AND MARKETS Reading Between the Lines SONY CORP. HAS CUT THE U.S. PRICE OF ITS PLAYSTATION 2 On May 14, 2002 Sony announced it was cutting the cost of its PlayStation 2 by 33 percent,

### Market Equilibrium, Price Floor, Price Ceiling

Porters 5 Forces: 1. Entrants sunk costs, switching costs, speed of adjustment, economies of scale, sunk costs, network effects, reputation, government restraints 2. Power of input suppliers supplier concentration,

### ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3A

ECON 2100 (Summer 2015 Sections 07 & 08) Exam #3A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. For a firm with market power Marginal Revenue, while for a firm

### Lesson 3-2 Profit Maximization

Lesson 3-2 Profit Maximization Standard 3b: Students will explain the 5 dimensions of market structure and identify how perfect competition, monopoly, monopolistic competition, and oligopoly are characterized

### Monopolistic Competition Oligopoly Duopoly Monopoly. The further right on the scale, the greater the degree of monopoly power exercised by the firm.

Oligopoly Monopolistic Competition Oligopoly Duopoly Monopoly The further right on the scale, the greater the degree of monopoly power exercised by the firm. Imperfect competition refers to those market

### Final Term Examination Spring 2006 Time Allowed: 150 Minutes. Question No. 1 Marks :1. Question No.

www.vustuff.com WWW.VUTUBE.EDU.PK ECO402 Microeconomic s Final Term Examination Spring 2006 Time Allowed: 150 Minutes Question No. 1 Marks :1 Economies of scale and economies of scope are synonymous. Question

### 2007 Thomson South-Western

BETWEEN MONOPOLY AND PERFECT COMPETITION Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Imperfect competition includes industries in which

### Imperfect Competition. Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly.

Oligopoly Imperfect Competition Imperfect competition refers to those market structures that fall between perfect competition and pure monopoly. Imperfect Competition Imperfect competition includes industries

### AGEC 105 Homework Consider a monopolist that faces the demand curve given in the following table.

AGEC 105 Homework 7 1. Consider a monopolist that faces the demand curve given in the following table. a. Fill in the table by calculating total revenue and marginal revenue at each price. Price Quantity

### Lecture 11. Firms in competitive markets

Lecture 11 Firms in competitive markets By the end of this lecture, you should understand: what characteristics make a market competitive how competitive firms decide how much output to produce how competitive

### Oligopoly and Monopolistic Competition

Oligopoly and Monopolistic Competition Introduction Managerial Problem Airbus and Boeing are the only two manufacturers of large commercial aircrafts. If only one receives a government subsidy, how can

### MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements is correct? A) Consumers have the ability to buy everything

### Unit 4: Imperfect Competition

Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique

### Perfect Competition CHAPTER14

Perfect Competition CHAPTER14 MARKET TYPES The four market types are Perfect competition Monopoly Monopolistic competition Oligopoly MARKET TYPES Perfect Competition Perfect competition exists when Many

### Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2014 15 Fall Semester ECON101 Introduction to Economics I Final Exam Type A 26 January 2015 Duration: 100 minutes

### 2007 Thomson South-Western

WHAT IS A COMPETITIVE MARKET? A competitive market has many buyers and sellers trading identical products so that each buyer and seller is a price taker. Buyers and sellers must accept the price determined

### ECON 102 Brown Final Exam Practice Exam Solutions

www.liontutors.com ECON 102 Brown Final Exam Practice Exam Solutions 1. B 2. C 3. C All products are identical (homogenous) in perfect competition so there is no such thing as brand preference. 4. C Breakeven

### Principles of Economics. January 2018

Principles of Economics January 2018 Monopoly Contents Market structures 14 Monopoly 15 Monopolistic competition 16 Oligopoly Principles of Economics January 2018 2 / 39 Monopoly Market power In a competitive

### PWNI I'IHITIIBIFI UNIVERSITY EXAMINER(S) INSTRUCTIONS FACULTY OF MANAGEMENT SCIENCES QUALIFICATION: BACHELOR OF ACCOUNTING

. I'IHITIIBIFI UNIVERSITY OF SCIENCE FII'ID TECHNOLOGY FACULTY OF MANAGEMENT SCIENCES DEPARTMENT OF ACCOUNTING, ECONOMICS AND FINANCE QUALIFICATION: BACHELOR OF ACCOUNTING QUALIFICATION CODE: Z3BECO LEVEL:

### ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions

www.liontutors.com ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions 1. A A large number of firms will be able to operate in the industry because you only need to produce a small amount

### Econ 98 (CHIU) Midterm 1 Review: Part A Fall 2004

Disclaimer: The review may help you prepare for the exam. The review is not comprehensive and the selected topics may not be representative of the exam. In fact, we do not know what will be on the exam.

### Economics 101 Section 5

Economics 101 Section 5 Lecture #22 April 13, 2004 Chapter 10 Monopolistic Competition Oligopoly Game Theory Monopolistic Competition 3 characteristics of a monopolistically competitive market 1) Many

### REDEEMER S UNIVERSITY

REDEEMER S UNIVERSITY Km 46/48 Lagos Ibadan Expressway, Redemption City, Ogun State COLLEGE OF MANAGEMENT SCIENCE DEPARTMENT OF ECONOMICS AND BUSINESS STUDIES COURSE CODE /TITLE ECO 202/Microeconomics

### OLIGOPOLY: Characteristics

OBJECTIVES Explain how managers of firms that operate in an oligopoly market can use strategic decision making to maintain relatively high profits Understand how the reactions of market rivals influence

### Unit 4: Imperfect Competition

Unit 4: Imperfect Competition 1 FOUR MARKET STRUCTURES Perfect Competition Monopolistic Competition Oligopoly Pure Monopoly Imperfect Competition Every product is sold in a market that can be considered

### Part III: Market Structure 12. Monopoly 13. Game Theory and Strategic Play 14. Oligopoly and Monopolistic Competition

and Part III: Structure 12. Monopoly 13. Game Theory and Strategic Play 14. and 1 / 38 and Chapter 14 and 2015.12.25. 2 / 38 and 1 2 3 4 5 3 / 38 and Q:How many firms are necessary to make a market competitive?

### ECONS 101 PRINCIPLES OF MICROECONOMICS QUIZ #6 Week 04/19/09 to 04/25/09

CHAPTER 14 Monopoly ECONS 101 PRINCIPLES OF MICROECONOMICS QUIZ #6 Week 04/19/09 to 04/25/09 1. Joe s price elasticity of demand for airplane travel is equal to 2, and Beth s price elasticity of demand

### MIDTERM - Version A Wednesday, May 4 Note: Throughout this test you must always show calculations to receive credit.

ECN 460/560, Spring 2005 NAME: Prof. Bruce Blonigen ID#: MIDTERM - Version A Wednesday, May 4 Note: Throughout this test you must always show calculations to receive credit. Use the following information

### MARKETS WITH MARKET POWER Microeconomics in Context (Goodwin, et al.), 3 rd Edition

Chapter 17 MARKETS WITH MARKET POWER Microeconomics in Context (Goodwin, et al.), 3 rd Edition Chapter Summary Now that you understand the model of a perfectly competitive market, this chapter complicates

### CH 14: Perfect Competition

CH 14: Perfect Competition Characteristics of Perfect Competition 1. Both buyers and sellers are price takers A price taker is a firm (or individual) who takes the price determined by market supply and

### CHAPTER NINE MONOPOLY

CHAPTER NINE MONOPOLY This chapter examines how a market controlled by a single producer behaves. What price will a monopolist charge for his output? How much will he produce? The basic characteristics

### Chapter 15: Industrial Organization

Chapter 15: Industrial Organization Imperfect Competition Product Differentiation Advertising Monopolistic Competition Oligopoly Collusion Cournot Model Stackelberg Model Bertrand Model Cartel Legal Provisions

### Section I (20 questions; 1 mark each)

Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important

### 2. What is Taylor s marginal utility per dollar spent on the 2 nd race? a. 2 b. 3 c. 4 d. 5

ECON 251 Practice questions based on Spring 2013 Exam 2 Taylor has \$100 to spend on playing golf and running in races. The price of a round of golf is \$20 and the price of running a race is \$10. The total

### Chapter 14 Perfectly competitive Market

Chapter 14 Perfectly competitive Market But first lets look at this Profit Maximization Profit Maximization This occurs where marginal revenue (MR) = marginal cost (MC). MR = MC Marginal revenue is the

### Economics. Monopolistic Perfect Competition. Monopolistic Competition. Monopolistic Competition 11/29/2013. The Big Picture. Perfect Competition

16 Modified by Joseph Tao-yi Wang Ron Cronovich The Big Picture Chapter 13: The cost of production Now, we will look at firm s revenue But revenue depends on market structure 1. Competitive market (chapter

### Monopoly. Cost. Average total cost. Quantity of Output

While a competitive firm is a price taker, a monopoly firm is a price maker. A firm is considered a monopoly if... it is the sole seller of its product. its product does not have close substitutes. The

### Quiz #4 Week 04/05/2009 to 04/11/2009

Quiz #4 Week 04/05/2009 to 04/11/2009 You have 30 minutes to answer the following 15 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your

### Oligopoly and Monopolistic Competition

Oligopoly and Monopolistic Competition Introduction Managerial Problem Airbus and Boeing are the only two manufacturers of large commercial aircrafts. If only one receives a government subsidy, how can