Order instructions
The marginal cost curve above the minimum average variable cost
| is the firm’s short-run supply curve. |
| is equal to the firm’s marginal revenue curve. |
| covers the area where a firm should shut down. |
| indicates points where the firm will realize an economic profit. |
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Question 21 pts
A monopolist will have a marginal revenue curve that is
| above the marginal cost curve. |
| below the demand curve. |
| identical to the marginal cost curve. |
| identical to the demand curve. |
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Question 31 pts
If, in the short run, a perfectly competitive firm is producing at a point where total cost is greater than total revenue, then the firm should
| set a lower price for its output. |
| set a higher price for its output. |
| continue to produce because accounting profits are positive. |
| continue to produce as long as P > AVC. |
| shut down because economic profits are negative. |
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Question 41 pts
A firm in a monopolistically competitive industry faces a downward-sloping demand curve because
| barriers to entry are high. |
| nonprice competition is missing. |
| the product is differentiated. |
| the product is homogeneous. |
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Question 51 pts
Which of the following is NOT an essential characteristic of monopolistic competition?
| a very elastic demand curve |
| short-run profits |
| relatively easy entry |
| differentiated products |
| a small number of sellers |
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Question 61 pts
A competitive firm
| has no supply curve. |
| must accept the price determined by the intersection of the market supply and demand curves. |
| has the ability to set its own price. |
| must base its competitive price on product differentiation. |
| can consider only its location in setting price. |
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Question 71 pts
Along a downward-sloping monopoly demand curve,
| marginal revenue is equal to zero when price is equal to zero. |
| marginal revenue decreases when price decreases. |
| elasticity of demand is constant. |
| marginal revenue is greater than price. |
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Question 81 pts
Under which market structure do firms face the flattest (most elastic) demand curve?
| perfect competition |
| monopolistic competition |
| oligopoly |
| monopoly |
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Question 91 pts
Average revenue (AR)
| does not appear in the model of perfect competition. |
| is greater than price when economic profits are present. |
| equals TR/Q. |
| occurs when MC = MR. |
Question 101 pts
When P = AR = MR = AC = MC,
| normal profits are negative. |
| normal profits are zero. |
| economic profits are negative. |
| economic profits are zero. |
| economic profits are positive. |
