Quiz 9_New_Sample.docx - Spring 2017 University of Arkansas...

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Spring 2017: University of Arkansas Econ 2023: Principles of Microeconomics Quiz 9: Sample 1) A monopolistically competitive market is described as one in which there are A) a few firms producing an identical product. B) a large number of firms selling similar, but not identical, products. C) a few firms producing differentiated products. D) one large firm and many small firms producing identical products. Answer: B Table 13-3 Quantity Price (dollars) Total Revenue (dollars) Total Variable Cost (dollars) Total Cost (dollars) 0 $21 $0 $0 $50 1 20 20 16 66 2 19 38 31 81 3 18 54 45 95 4 17 68 59 109 5 16 80 75 125 6 15 90 93 143 7 14 98 112 162 8 13 104 140 190 9 12 108 180 230 10 11 110 230 280 Table 13-3 shows the demand and cost schedules for a monopolistically competitive firm. 2) Refer to Table 13-3. What are the profit-maximizing/loss-minimizing output level and price? A) Q =0 (firm should not produce) B) Q =3; P =$18 C) Q =4; P =$17 D) Q =5; P =$16 Answer: C 3) Refer to Table 13-3. What is the amount of the firm's loss at its optimal output level?
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