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# PracticeQuestions - MANEC 387 Practice Final Exam 1. An...

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MANEC 387 Practice Final Exam 1. An industry is comprised of 20 firms, each with an equal market share. What is the 4- firm concentration ratio of this industry? a) .2. b) .4. c) .6. d) .8. 2. Oligopoly differs from monopoly as follows: a) Oligopoly involves a few firms; monopoly involves a single firm. b) Oligopoly does use advertisement; monopoly does not use advertisement. c) Oligopoly involves free entry; monopoly involves no free entry. d) a and c. 3. Suppose that there are two industries, A & B. There are five firms in industry A with sales at \$5 million, \$2 million, \$1 million, \$1 million, and \$1 million, respectively. There are 4-firms in industry B with equal sales of \$2.5 million for each firm. The HHI for industry A is a) 3200. b) 2800. c) 1800. d) 2500. 4. An electronic company takes over one of its original suppliers in a merger. This is an example of: a) vertical integration. b) horizontal integration. c) cointegration. d) conglomerate integration. 5. You are the manager of a firm that sells its product in a competitive market at a price of \$50. Your firm's cost function is C = 40 + 5Q 2 . The profit-maximizing output for your firm is a) 4/5. b) 10. c) 5. d) 45. 1

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6. You are the manager of a firm that sells its product in a competitive market at a price of \$40. Your firm's cost function is C = 60 + 4Q 2 . Your firm's maximum profits are a) 36. b) 60. c) 40. d) 80. 7. You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C = 5 + 30Q. Your firm's maximum profits are a) 495. b) 475. c) 480. d) 415. 8. Which of the following market structures would you expect to yield the greatest in- market product variety? a) Monopoly. b) Monopolistic Competition. c) Bertrand Oligopoly. d) Perfect Competition. 9. What contributes to the existence of multiproduct firms? a) economies of scale. b) economies of scope. c) cost complementarity. d) both b and c. 10. A firm has a total cost function of C(Q) = 50 + 10Q 1/2 . The firm experiences a) economies of scale. b) constant returns to scale. c) diseconomies of scale. d) any of the above. 11. Which of the following probably would NOT be a barrier to entry? a) reputation b) incumbent cost structure c) learning d) access to standard production machines 12. Both firms in a Cournot duopoly would enjoy higher profits if a) the firms simultaneously reduced output below the Nash equilibrium level. b) each firm simultaneously increased output above the Nash equilibrium level. c) one firm reduced output below the Cournot Nash equilibrium level, while the other firm continued to produce its Cournot Nash equilibrium output. d) a. and c. 2
13. The market demand in a Bertrand duopoly is P = 10 - 3Q, and the marginal costs are \$1. Fixed costs are zero for both firms. Which of the following statement(s) is/are true? a)

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## This note was uploaded on 01/05/2012 for the course MANEC 387 taught by Professor Crawford,l during the Fall '08 term at BYU.

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PracticeQuestions - MANEC 387 Practice Final Exam 1. An...

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