quiz 7

quiz 7 - 1. To profit maximize the firm in figure 14.1 will...

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1. To profit maximize the firm in figure 14.1 will produce: Possible Answers A. Q1. B. Q2. C. Q3. D. Q4. 2. Governments grant patents to encourage: Possible Answers A. low prices. B. competition. C. research and development on new products. D. all of the above. 3. Game theory is useful in analyzing oligopoly behavior because: Possible Answers A. it explains why oligopolies fail to make persistent profits. B. trying to maximize profits is essentially a game in all types of markets. C. interaction among a few large firms are what determines the level of profits. D. advertising is so common among oligopoly firms. 4. To sell more output, the monopolist: Possible Answers A. only has to produce more. B. must lower production costs. C. has to advertise the product extensively. D. has to lower the product's price.
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5. The type of firms that do not have market power are: Possible Answers A. monopolistically competitive. B. monopolies. C. oligopoly. D. perfectly competitive. 6. A cartel is: Possible Answers A. an informal agreement to fix prices to maximize joint profits. B. a competitive industry. C. a formal agreement to fix prices to maximize joint profits. D. temporary storage facility for automobiles. 7. In figure 13.1, Coke's dominant strategy is: Possible Answers A. to produce a low quantity. B. to not advertise. C. to advertise. D. to produce a high quantity. 8. A characteristic found only in oligopolies is: Possible Answers A. breakeven level of profits. B. products that are slightly different. C. independence of firms. D. interdependence of firms.
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9. A dominant strategy in a game theory analysis of oligopoly behavior is: Possible Answers A. the strategy that a firm is forced into following by government policy. B. colluding with rivals to maximize joint profits. C. a strategy that is the best for a firm, no matter what strategies other firms use. D. deciding what to do after all rivals have chosen their own strategies. 10. An example of a barrier to entry is: Possible Answers A. ownership of a key input. B. government imposed restrictions. C. economies of scale. D. all of the above. 11. A monopoly: Possible Answers A. must lower price to sell more of its product. B. is a price taker. C. always earns a profit. D. all of the above. 12. The Sherman Act prohibited: Possible Answers A. collusive price agreements among rival sellers. B. marginal cost pricing.
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C. selling below average total cost. D. setting price above marginal cost. 13. If there are only two firms in a market, it is known as a: Possible Answers A. duopoly. B.
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quiz 7 - 1. To profit maximize the firm in figure 14.1 will...

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