front 1 In Figure 24.1, the profit-maximizing monopolist will charge a price of | back 1 A - the highest price possible |
front 2 In Figure 24.2, the profit-maximizing level of output is | back 2 4 units (intersection of MR & MC) |
front 3 In Figure 24.2, the profit-maximizing monopolist will earn a profit per unit of | back 3 $1.50 |
front 4 The profit-maximizing rate of output in Figure 24.1 is | back 4 F (quantity where MR = MC) |
front 5 A barrier to entry is | back 5 An obstacle that makes it difficult for new firms to enter a market. |
front 6 A major difference between monopoly and monopolistic competition is | back 6 The number of firms in the market. |
front 7 A monopolist will find that its marginal revenue curve | back 7 Lies below its demand curve and is steeper than its demand curve |
front 8 A monopolistically competitive firm can raise its price somewhat without fear of great change in unit sales because | back 8 Of product differentiation and brand loyalty |
front 9 An industry's market structure refers to | back 9 The number and size of the firms in the industry |
front 10 Both perfect competitors and monopolistic competitors | back 10 Earn zero economic profit in the long run |
front 11 Each producer in monopolistic competition has | back 11 Some market power. |
front 12 Entry into a market characterized by monopolistic competition | back 12 Is frequent because barriers to entry are low. |
front 13 Firms in a monopolistically competitive market will | back 13 Use the profit-maximizing rule MC = MR |
front 14 If a firm can change market prices by altering its output, then it | back 14 Has market power |
front 15 If the entire output of a market is produced by a single seller, the firm | back 15 Is a monopoly |
front 16 If there are many firms in an industry producing goods that are similar but slightly different, this is an example of | back 16 Monopolistic competition. |
front 17 In monopolistic competition, a firm | back 17 Has a downward-sloping demand curve |
front 18 Large cities typically have many drugstores that offer different levels of service and product selection. The drugstore market in big cities can best be classified as | back 18 Monopolistic competition. |
front 19 Market power is the ability of a firm to | back 19 Control the price and quantity supplied |
front 20 Market share is the percentage of total | back 20 Market output produced by a single firm |
front 21 Monopolists set prices | back 21 At the output where marginal revenue equals marginal cost. |
front 22 Product differentiation | back 22 Involves advertising unique product features |
front 23 Product differentiation refers to | back 23 Features that make one product appear different from competing products in the same marke |
front 24 Reductions in minimum average costs that come about through increases in the size of plants and equipment are called | back 24 Economies of scale |
front 25 The concentration ratio measures the | back 25 Proportion of total output produced by the four largest producers in a specific marke |
front 26 The demand curve faced by a monopolistically competitive firm is | back 26 Downward-sloping |
front 27 The demand curve will be kinked if rival oligopolists | back 27 Match price reductions but not price increases. |
front 28 The goal of a company in an oligopoly industry is to | back 28 Increase market share and profits |
front 29 The kinked demand curve explains the observation that in oligopoly markets | back 29 Prices may not change even in the face of cost increases |
front 30 The only market structure in which there is significant interdependence among firms with regard to their pricing and output decisions is | back 30 Oligopoly |
front 31 The soft drink market is dominated by Coke, Pepsi, and very few other firms. The firms often start price wars. The market can best be classified as | back 31 Oligopoly |
front 32 There are many corn farmers, each of whom produces the same product. The corn market can best be classified as | back 32 Perfect competition. |
front 33 What is the most likely response by rivals when an oligopolist cuts its price to increase its sales? | back 33 Cut their prices |
front 34 When firms are interdependent, | back 34 The profit of one firm depends on how its rivals respond to its strategic decisions. |
front 35 Which of the following characterizes monopolistic competition? | back 35 Many firms produce a particular type of product, but each maintains some independent control over its own price |
front 36 Which of the following industries is likely to have the highest concentration ratio? | back 36 Video game systems |
front 37 Which of the following is a barrier to entry in a monopoly market? | back 37 A patent on a new product. |
front 38 Which of the following is a barrier to entry in a monopoly market? | back 38 Economies of scale |
front 39 Which of the following is likely to be a monopolist? | back 39 A drug firm that has a patent granting it the exclusive right to produce a drug. |
front 40 Which of the following is not characteristic of monopolistic competition? | back 40 Firms have zero control over price |
front 41 Which of the following is not true about a monopolistic competitor? | back 41 It can earn economic profits in the long run |
front 42 Which of the following is true about a monopolistically competitive firm in the long run? | back 42 It tends to realize only a normal profit |
front 43 Which of the following is true for a monopolist? | back 43 It must lower its price on all of its units in order to sell any additional units. |
front 44 Which of the following may not characterize an oligopoly? | back 44 No market power. |
front 45 Which of the following rules is satisfied when a monopoly maximizes profits? | back 45 MR = MC. |