10 points QUESTION 2
- Which of the following is a criticism of
average-cost pricing as a regulatory response to a natural monopoly?
10 pointsQUESTION 3
- In the long run, monopolistically competitive firms:
- earn zero economic profit.
- face perfectly elastic demand curves.
- tend to standardize their products.
- produce output at minimum marginal cost.
- merge and form a few dominant firms to maximize profit.
10 pointsQUESTION 4
- Refer to Figure 8-1. If the firm operates as a monopoly in an unregulated market, its profit-maximizing price and output would be _____, respectively.
- C and Q
- A and Q
- B and R
- D and P
- A and T
10 pointsQUESTION 5
- Refer to Figure 8-1. The efficient level of output in the market is:
- R - P.
10 pointsQUESTION 6
- Which of the following is true in the long run under monopolistic competition?
- P = MC.
- P = AC.
- P > AC > MC.
- Price > AC = MC.
- MR > MC.
10 pointsQUESTION 7
- In a perfectly competitive market, industry demand is: P = 850 - 4.7Q, and industry supply is: P = 250 + 4Q (Supply is the sum of the marginal cost curves of the firms in the industry). If instead all of the firms behave as a cartel, prices will increase by ____.
- Hint: Round your answer to two decimal places
10 pointsQUESTION 8
- Unlike perfectly competitive markets, monopolistically competitive markets:
- have significant barriers to entry.
- face declining average costs at all levels of output.
- have fewer firms.
- produce differentiated products.
- Answers face declining average costs at all levels of output and produce differentiated products are both correct.
10 pointsQUESTION 9
- Which of the following is a characteristic of a firm that is a natural monopoly?
- The firm's average costs decline over all levels of output.
- The firm's elasticity of supply is very low.
- The firm does not incur any sunk costs.
- The firm faces a horizontal demand curve.
- The firm makes zero economic profit.
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