Multiple Choice Questions

both a monopoly and a competitive firm.
  • A monopolistically competitive market could be considered inefficient because
  • A monopolistically competitive market has characteristics that are similar to
  • A monopolistically competitive firm chooses its
  • A distinguishing feature of an oligopolistic industry is the tension between
. require an outlay of money by the firm
  • Economies of scale occur when
  • Other things the same, in which case is the quantity produced the highest?
  • Explicit costs
  • Marginal cost tells us the
increase in output obtained from a one unit increase in labor.
  • The practice of tying is used to
  • The short-run supply curve for a firm in a perfectly competitive market is
  • The marginal product of labor is equal to the
  • Diminishing marginal product suggests that the marginal
as a single monopolist.
  • For a firm in a perfectly competitive market, the price of the good is always
  • An agreement among firms regarding price and/or production levels is called
  • Who is a price taker in a competitive market?
  • As a group, oligopolists would always be better off if they would act collectively
product of an extra worker is less than the previous worker's marginal product.
  • Diminishing marginal product suggests that the marginal
  • The short-run supply curve for a firm in a perfectly competitive market is
  • profits as large as possible, even if it means reducing output.
  • The marginal product of labor is equal to the
equal to marginal revenue.
  • If a firm in a competitive market doubles its number of units sold, total revenue for the firm will
  • If firms in a monopolistically competitive market are earning positive profits, then
  • A monopolistically competitive market could be considered inefficient because
  • For a firm in a perfectly competitive market, the price of the good is always
total cost
  • Which of the following can be added to profit to obtain total revenue?
  • Which of the following goods are not likely to be sold in monopolistically competitive markets?
  • Which of the following conditions distinguishes monopolistic competition from perfect competition?
  • Which of the following is a characteristic of monopolistic competition?
a. price. b. average revenue. c. total revenue divided by output. All of the above are correct.
  • Firms operating in competitive markets produce output levels where marginal revenue equals
  • Which of the following statements regarding a competitive market is not correct?
  • If firms in a monopolistically competitive market are earning positive profits, then
  • A monopolistically competitive market could be considered inefficient because
exit if P < ATC
  • Which of the following represents the firm's long-run condition for exiting a market?
  • We must be knowledgeable of how people behave in strategic situations if we are to understand
  • inputs that were fixed in the short run become variable.
  • Which of the following can be added to profit to obtain total revenue?
package products to sell at a combined price closer to a buyer's total willingness to pay.
  • A production function describes
  • When an oligopoly market reaches a Nash equilibrium,
  • The practice of tying is used to
  • The marginal product of labor is equal to the
society is better served by having one firm supply the product
  • In order to sell more of its product, a monopolist must
  • When a firm experiences continually declining average total costs,
  • Who is a price taker in a competitive market?
  • When new firms have an incentive to enter a competitive market, their entry will
a monopoly firm reducing its price in an attempt to maintain its monopoly.
  • Predatory pricing refers to
  • Economies of scale occur when
  • free entry
  • Marginal cost tells us the
tap water
  • Which of the following conditions distinguishes monopolistic competition from perfect competition?
  • Which of the following represents the firm's long-run condition for exiting a market?
  • Which of the following goods are not likely to be sold in monopolistically competitive markets?
  • Which of the following can be added to profit to obtain total revenue?
decreasing marginal product.
  • The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
  • A distinguishing feature of an oligopolistic industry is the tension between
  • If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should
  • If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits
long-run average total costs fall as output increases.
  • profits as large as possible, even if it means reducing output.
  • For a monopolist, marginal revenue is
  • A production function describes
  • Economies of scale occur when
price and quantity just as a monopoly does.
  • Imperfectly competitive firms are characterized by
  • A monopolistically competitive firm chooses its
  • A monopolistically competitive market could be considered inefficient because
  • For a monopolist, marginal revenue is
government-created monopolies.
  • When an oligopoly market reaches a Nash equilibrium,
  • Patent and copyright laws are major sources of
  • When an oligopoly grows very large, the
  • A firm's opportunity costs of production are equal to its
lower its price.
  • Which of the following is a characteristic of a monopoly?
  • Imperfectly competitive firms are characterized by
  • In order to sell more of its product, a monopolist must
  • An agreement among firms regarding price and/or production levels is called
less than price, whereas marginal revenue is equal to price for a perfectly competitive firm.
  • The marginal product of labor is equal to the
  • The practice of tying is used to
  • For a monopolist, marginal revenue is
  • Predatory pricing refers to
collusion.
  • Who is a price taker in a competitive market?
  • An agreement among firms regarding price and/or production levels is called
  • When a firm experiences continually declining average total costs,
  • If a firm in a competitive market doubles its number of units sold, total revenue for the firm will
resale price maintenance.
  • Which of the following pairs illustrates the two extreme examples of market structures?
  • The practice of selling a product to retailers and requiring the retailers to charge a specific price for the product is called
  • The practice of tying is used to
  • If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should
oligopolistic markets.
  • We must be knowledgeable of how people behave in strategic situations if we are to understand
  • The practice of selling a product to retailers and requiring the retailers to charge a specific price for the product is called
  • The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
  • Which of the following pairs illustrates the two extreme examples of market structures?
. undesirable, because it leads to output levels that are too low and prices that are too high.
  • profits as large as possible, even if it means reducing output.
  • From society's standpoint, cooperation among oligopolists is
  • The short-run supply curve for a firm in a perfectly competitive market is
  • Diminishing marginal product suggests that the marginal
barriers to entry
  • Which of the following is a characteristic of monopolistic competition?
  • Which of the following can be added to profit to obtain total revenue?
  • Which of the following represents the firm's long-run condition for exiting a market?
  • Which of the following is a characteristic of a monopoly?
Price exceeds marginal revenue.
  • A monopolistically competitive market could be considered inefficient because
  • Which of the following represents the firm's long-run condition for exiting a market?
  • Which of the following statements regarding a competitive market is not correct?
  • Which of the following pairs illustrates the two extreme examples of market structures?
a one-unit increase in output will increase the firm's profit.
  • Firms operating in competitive markets produce output levels where marginal revenue equals
  • If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then
  • If a firm in a competitive market doubles its number of units sold, total revenue for the firm will
  • If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits
duopoly.
  • The economic inefficiency of a monopolist can be measured by the
  • The simplest type of oligopoly is
  • The practice of tying is used to
  • Marginal cost tells us the
shut down if P < AVC.
  • Imperfectly competitive firms are characterized by
  • We must be knowledgeable of how people behave in strategic situations if we are to understand
  • Competitive firms that earn a loss in the short run should
  • For a firm in a perfectly competitive market, the price of the good is always
In the long run,
  • inputs that were fixed in the short run become variable.
  • Which of the following is a characteristic of a monopoly?
  • Competitive firms that earn a loss in the short run should
  • Imperfectly competitive firms are characterized by
both buyers and sellers
  • Who is a price taker in a competitive market?
  • As a general rule, when accountants calculate profit they account for explicit costs but usually ignore
  • In order to sell more of its product, a monopolist must
  • When a firm experiences continually declining average total costs,
price making ability.
  • When an oligopoly grows very large, the
  • A monopolistically competitive firm chooses its
  • Imperfectly competitive firms are characterized by
  • Competitive firms that earn a loss in the short run should
free entry
  • Which of the following can be added to profit to obtain total revenue?
  • Which of the following is a characteristic of a monopoly?
  • Which of the following statements regarding a competitive market is not correct?
  • Which of the following is a characteristic of monopolistic competition?
a firm will have chosen its best strategy, given the strategies chosen by other firms in the market.
  • When an oligopoly market reaches a Nash equilibrium,
  • The practice of tying is used to
  • The short-run supply curve for a firm in a perfectly competitive market is
  • When an oligopoly grows very large, the
price effect disappears.
  • A monopolistically competitive firm chooses its
  • Which of the following statements regarding a competitive market is not correct?
  • Imperfectly competitive firms are characterized by
  • When an oligopoly grows very large, the
the portion of its marginal cost curve that lies above its average variable cost.
  • Other things the same, in which case is the quantity produced the highest?
  • The marginal product of labor is equal to the
  • Firms operating in competitive markets produce output levels where marginal revenue equals
  • The short-run supply curve for a firm in a perfectly competitive market is
deadweight loss.
  • If there is an increase in market demand in a perfectly competitive market, then in the short run
  • The economic inefficiency of a monopolist can be measured by the
  • Which of the following is a characteristic of monopolistic competition?
  • Which of the following represents the firm's long-run condition for exiting a market?
profit is maximized.
  • The practice of selling a product to retailers and requiring the retailers to charge a specific price for the product is called
  • The intersection of a firm's marginal revenue and marginal cost curves determines the level of output at which
  • Which of the following conditions distinguishes monopolistic competition from perfect competition?
  • If there is an increase in market demand in a perfectly competitive market, then in the short run
There are a very large number of firms.
  • Other things the same, in which case is the quantity produced the highest?
  • The short-run supply curve for a firm in a perfectly competitive market is
  • In which of the following markets are strategic interactions among firms most likely to occur?
  • A distinguishing feature of an oligopolistic industry is the tension between
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Multiple Choice Questions
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