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Unformatted text preview: arkets are perfectly competitive. What output of milk maximizes profits? A. 1.25. B. 12.5. C. 15. D. 20. 5. Differentiated goods are not a feature of a A. perfectly competitive market. B. monopolistically competitive market. C. monopolistic market. D. perfectly competitive market and monopolistic market. 1 6. One of the sources of monopoly power for a monopoly may be A. diseconomies of scale. B. differentiated products. C. patents. D. free entry and exit. 7. Which of the following is true under monopolistic competition in the long run? A. profits are always zero. B. P > MC. C. P = MR. D. all of the choices are true in monopolistic competition. 8. Consider a monopoly where the inverse demand for its product is given by P = 50 ‐ 2Q. Total costs for this monopolist are estimated to be C(Q) = 100 + 2Q + Q2. At the profit‐maximizing combination of output and price, consumer surplus is A. $32. B. $64. C. $128. D. cannot be determined with the given information. 9. Two identical firms compete as a Cournot duopoly. The...
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This note was uploaded on 12/10/2012 for the course ECON 5501 taught by Professor Wing during the Fall '12 term at City University of Hong Kong.

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