chapter9 practice questions

chapter9 practice questions - Chapter 9 I. Multiple Choice...

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Chapter 9 I. Multiple Choice Questions: 1. An imperfectly competitive firm is one A) that attempts but fails to compete perfectly. B) with the ability to set price at any level it wishes. C) that possesses some degree of control over its price. D) that faces perfectly inelastic demand. 2. If a firm functions in an oligopoly, it A) is one of a few firms that produces a good with close substitutes. B) has no close substitutes in a market. C) is one of many suppliers of a good with perfect substitutes. D) is the only firm in a geographic region. 3. In order to sell another unit, an imperfectly competitive firm must A) increase its advertising. B) increase the value of its product. C) lower its price. D) lower its quality. 4. Suppose a firm is collecting $100 in total revenues when it sells 10 units and it receives $110 in total revenues when it sells 11 units. The firm is a(n) A) pure monopolist. B) oligopolist. C) monopolistic competitor. D) perfect competitor. 5. A downward sloping demand function A) is characteristic of both a perfectly competitive firm and a monopolistic firm. B) necessarily implies that the firm's marginal revenue will be less than price. C) is true only of firms in a perfectly competitive industry. D) indicates the presence of economies of scale. 6. To sell an extra unit of output, a perfect competitor __________ while an imperfect competitor __________. A) does not alter price; must lower price B) must hope the market price falls; must lower price C) does not alter price; does not alter price either D) must lower price; must lower price 1
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Use the following to answer questions 7-9: In exchange for a share in the revenues earned on campus, State U has granted CheapFizz the exclusive right to sell soft drinks in the student union and in vending machines on campus. Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its products on campus or at university events. 7. CheapFizz now has market power due to
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chapter9 practice questions - Chapter 9 I. Multiple Choice...

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