EconoQuestionsGG1a - Thank you for your help. Question 1 As...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Thank you for your help. Question 1 As a firm's market power in pricing decreases, the price elasticity of its demand: a) stays the same. b) decreases. c) is equal to one. d) increases. Question 2 For decision making for the firm with market power, fixed costs are: a) a key element in the markup. b) irrelevant. c) the same as marginal costs. d) opportunity costs of production. Question 3 In a purely competitive market, a company selling in the market views its demand curve as: a) completely price insensitive. b) horizontal (flat). c) vertical. d) convex. Question 4 The key to the importance of the marginal cost curve of a company is that it is a company's: a) supply curve of product to the marketplace. b) demand curve for its product to the marketplace. c) average cost of product in both the short and long run d) fixed cost. Question 5 If Tiger Toys faces a demand curve of P = 85 - .25Q and a MC = ATC = 20, then the economic profits would be: a) $130.00 b) $6,825.00 c) $2,600.00 d) $4,225.00 Question 6 If Tiger Toys faces a demand curve of P = 85 - .25Q and a MC = ATC = 20, then the market price would be: a) $85.00 b) $52.50 c) $130.00 d) $32.50 Question 7 In a perfectly competitive market, the price that the firm faces from supply and demand is also equal to: a) average variable cost b) marginal revenue and average revenue c) average revenue but never marginal revenue d) long run average cost in the short run Question 8 A firm with market power in pricing faces a: a) flat demand curve b) vertical demand curve in all cases c) price inelastic demand curve d) downward sloping demand curve Question 9 While very few markets are 'purely competitive' according to the strict economics definition, market analysts often use competition as the:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
a) benchmark from which to judge other market settings b) standard of an inefficient market structure c) market with poor entry and exit conditions
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

EconoQuestionsGG1a - Thank you for your help. Question 1 As...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online