Reference no: EM133518833

Questions

1. If a monopoly raises their prices, the ______ curve will shift to the ______________.

Demand, left
Demand, right
Supply, left
Supply right

2. The typical slope of the demand curve as perceived by a monopolistic competitor will

be the same as that of a monopolist but slightly steeper.
be less of a decline in demand for the monopolistic competitor than for a monopolist that raised its prices.
demonstrate that firms' ability to raise its price without losing all of its customers.
be reflective of a perfectly competitive firm and all of the above.

3. A monopolistic competitive market falls in between that of a perfectly competitive market and a monopolistic market. As such, a monopolistic competitive market has all the following characteristics, except:

More control over price than a perfectly competitive market
Differentiated products
Many firms
Lack of resources

4. If the firm is producing at a quantity of output where the marginal revenue (MR) exceeds marginal cost (MC), then

The firm should keep expanding production.
The firm's perceived demand curve will shift to the left.
MR>MC, the firm is now earning zero profits.
each marginal unit adds profits by bringing in less revenue than it cost.

5. In some cases, barriers to entry may lead to a _______________: in other market conditions, they may limit competition to _________________.

Pure monopoly; to a natural monopoly
Pure monopoly; to a few oligopolistic firms
Natural Monopoly; to a few oligopolistic firms
Natural monopoly; to a few perfectly competitive firms

6. The XYX Steel slashes prices drastically as an attempt to discourage short run competition, this is a strategy known as

price fixing
Predatory pricing
Competition
Collusion

7. As a result of entry and exit into the market, monopolistically competitive firms end up with a price that lies

at the very top of the average cost (AC) curve.
on the downward sloping portion of the average cost (AC) curve.
at the very bottom of the average cost (AC)curve.
on the upward portion of the average cost (AC) curve.

8. Since there are __________, the demand curve facing a monopolistically competitive firm is more ____________than that of a monopoly.

no substitutes; elastic
complements; inelastic
substitutes; elastic
substitutes; inelastic

9. The slope of the demand curve for a monopoly firm is:

Flat; this means the firm must sell either a low quantity or high quantity at exactly the same price.
The same as the market demand curve, which is downward sloping.
Horizontal, meaning that the monopolist has little control over quantity produced.
Curved.

10. Operating individually, an oligopolist may seek to gain profits by ___________, and __________________.

Advertising; cutting prices
Expanding levels of output; cutting prices
Engaging in predatory pricing; having a mini- monopoly
Selling distinctive products; advertising