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Imperfect Comp. Test
Imperfect Comp. Test
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Questions
27
Answers
1
A perfectly competitive firm would produce at which of the following outputs?
L
N
G
M
2
If Firm 2 prices High, Firm 1 should...
Price Low
Price High
3
In order for a monopolist to sell one more of an item, they must lower their price.
False
True
4
A monopolist will maximize profits by charging...
where ATC= Price
where MR=MC, up to the demand curve
a price equal to MR=MC
a price equal to MR=ATC
5
This firm is making a
Loss
Profit
6
If both firms DO NOT COOPERATE,what will Firm 1's daily profit be?
$40
$100
$80
$50
7
What is this firm's per unit cost?
$100
$60
$80
$20
8
Coke and Pepsi are considered to be what type of market structure?
Perfect Competition
Monopoly
Monopolistic Competition
Oligopoly
9
"Do not cooperate" means that firms should be concerned about other firms profits.
False
True
10
A perfectly competitive market would set their quantity at?
N
L
M
E
11
In order for a monopolistically competitive firm to be in long-run, what must occur?
Price will be at MR=MC
ATC> P
ATC=P
ATC<P
12
Perfect competition is different than a monopoly because there is no MRDARP.
True
False
13
What area represents TR?
AJGC
AJHB
0AJE
0BHE
14
Firm 1's dominant strategy would be
Price low
Leave the market
Follow Firm 2
Price High
15
Economies of scale, patents and owning raw materials are all considered...
Barriers to Exit
The golden rule
Non-price competition
Barriers to Entry
16
All market structure graphs follow the golden rule.
False
True
17
A monopolist would set their price at...
E
D
C
B
18
Corn farmers are mostly associated with which market structure?
Perfect Competition
Monopolistic Competition
Monopoly
Oligopoly
19
if a market is dominated by four large firms that sell similar products and use non-price competition, then...
They are perfectly competitive
They are regulated by the government
They are efficient
They are interdependent
20
Oligopolists use game theory to
become a monopoly
Maximize profits
beat their competitor
increase collusion
21
If the mall were to add two more big box stores, what will happen to the demand for the original stores?
Demand will decrease
Demand will stay the same
Supply will decrease
Demand will increase
22
What is the total profit for this firm?
$20
$200
$1000
$80
23
If this firm began to price discriminate, what quantity would they produce?
E
N
M
L
24
In most situations, a cartel will use _________ to maximize profits.
Non-price competition
Collusion
Game theory
Excess Capacity
25
Large number of firms selling differentiated products is called
Monopolistic Competition
Perfect Competition
Monopoly
Oligopolly
26
A monopolist produces
a price at MR=MC
too little of a good at a low price
too little of a good at a higher price
Too much of a good at a higher price
27
Which of the following represents consumer surplus?
AGD
HJ
AFC
AEB
