ECON201 Week 7 Quiz SCORE 100 PERCENT

Quiz

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Question 1 (10 points)

 

Monopolistic competition is an industry characterized by a:

Question 1 options:

	small number of firms producing identical products, with barriers to entry for firms.
	small number of firms producing similar products, with relatively easy entry for firms.
	large number of firms producing similar products, with relatively easy entry for firms.
	large number of firms producing identical products, with relatively easy entry for firms.

Question 2 (10 points)

 

Imperfect competition is:

Question 2 options:

	a market structure with no more than one firm in the industry.
	an industry in which all firms are price takers.
	a market structure where firms have a degree of monopoly power.
	described by all of the above.

Question 3 (10 points)

 

Imperfect competition includes:

Question 3 options:

	monopolistic competition and oligopoly.
	monopolistic competition and monopoly.
	perfect competition and monopoly.
	monopoly and oligopoly.

Question 4 (10 points)

 

A firm in monopolistic competition maximizes its profit by producing at the level at which:

Question 4 options:

	MC = ATC.
	MC = AR.
	MC = P.
	MC = MR.

Question 5 (10 points)

 

An industry characterized by many firms, producing similar but differentiated products, in a market with easy entry and exit is called:

Question 5 options:

	perfect competition.
	monopoly.
	monopolistic competition.
	oligopoly.

Question 6 (10 points)

 

An oligopoly knows that its _______ affect(s) its _______ and that the _______ of its rivals will affect it.

Question 6 options:

	actions; rivals; reactions
	price changes ; total revenue in a positive way; reactions
	actions rarely; rivals; actions
	price increases; total revenue in the long run only; large but not small price changes

Question 7 (10 points)

 

A concentration ratio is used to measure:

Question 7 options:

	efficiency.
	diseconomies of scale.
	marginal cost.
	market dominance.

Question 8 (10 points)

 

An industry dominated by a few firms, where each of those firms recognizes that its own choices will affect the choices of its rivals and that its rivals' choices will affect it, is a(n):

Question 8 options:

	monopoly.
	oligopoly.
	monopolistic competition.
	perfect competition.

Question 9 (10 points)

 

Price for a firm under monopolistic competition is:

Question 9 options:

	equal to marginal revenue.
	greater than marginal revenue.
	less than marginal revenue.
	greater than total revenue.

Question 10 (10 points)

 

Unwritten or unspoken understandings through which firms collude to restrict competition are called:

Question 10 options:

	cartelization.
	oligopolization.
	overt collusion.
	tacit collusion.

Profit Maximization for a Firm in Monopolistic Competition

Question 11 (10 points)

 

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Before the innovation reduced the cost, the firm's maximum economic profit was:

Question 11 options:

	$0.
	$30.
	$750.
	$4,500.

Question 12 (10 points)

 

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition.) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' After the innovation reduced the cost, the firm's maximum economic profit is:

Question 12 options:

	$0.
	$30.
	$1,500.
	$3,000.

Question 13 (10 points)

 

(Exhibit: Profit Maximization for a Firm in Monopolistic Competition) Suppose that an innovation reduces a firm's fixed costs and reduces cost from ATC to ATC' Suppose further that after the innovation reduced the cost to ATC?, it costs a total of $18 per unit to produce 170 units per day. If the firm charges a price equal to marginal cost, total net profit will be:

Question 13 options:

	$1,700.
	$1,190.
	$3,060.
	$3,400.