worksheet final exam

worksheet final exam - WorksheetFinalExam Name_ 1.

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Worksheet Final Exam Name ______________________ 1. (10) Monopolistic competition and Oligopoly A monopolistically competitive firm is producing 50 units of output in the short run  where marginal cost is $3.00, average total costs are $5.00, price is $4.50,  average variable cost is $4.00, and marginal revenue is $3.00.  Based on this  information: a.  Per unit (profit or loss—circle one) is _$________ b. Total Fixed Cost is _$________ c. What output recommendation would make for this firm?  Try to find a way to cut costs by lowering costs.  Consider ad vertising,  and consider shutting down.  A firm shuts down when the price is  underneath average variable cost. 2.  (5) True-False-Uncertain-Explain “In imperfectly competitive markets neither allocative nor productive efficiency is  realized.” TRUE because there is excess capacity in imperfect markets. 3.  (20) A new production process has reduced the cost of producing product A.   a. Graphically show what will happen to profits for this firm as they enter the  innovation phase. b. Graphically show how this firm’s  market structure will change as the firm  first moves away from a perfectly competitive situation and then the 
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This note was uploaded on 03/24/2010 for the course ECO 113 taught by Professor Briggs during the Fall '07 term at Bryant.

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worksheet final exam - WorksheetFinalExam Name_ 1.

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