ECON 2100 Midterm: ECON 2100 Kennesaw State ECON2100 Fall2018 Exam3B Key

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turquoisegnu128

31 Jan 2019

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Market power refers to a situation in which a firm has some control over the price of its output (i. e. , the firm faces a downward sloping demand curve). Excess capacity refers to the amount by which the output of a firm is less than the efficient scale of output. If a good is such that it is easy to prevent consumption by those who do not pay for the good, then the good in question is an excludable good. __________________ is a market structure in which there is one single seller of a unique good (with no close substitutes ) and in which there are barriers to entry which prevent rival firms from entering the market. When presented with different options, a distinct voter type is defined by ordered preferences over the different options. For example, if having to choose between only two options,

Related Questions

A firm that is a "pure monopoly" is:

		a. A seller of a highly advertised and differentiated product in a market with low barriers to entry in the long-run.
		b. The only seller of a good for which there are no good substitutes in a market with high barriers to entry.
		c. The only buyer of unique raw material.
		d. The producer of a product subsidized by the government.

coffeeprairie-dog291

Why is price considered to be a "given" by an individual firm selling in a purely competitive market?

a) the firm's demand curve is downward sloping.

b) there are no good substitutes for the firm's product.

c) each seller supplies a negligible fraction of the total supply.

d) product differentiation is reinforced by extensive advertising.

turquoisefrog190

QUESTION 22

For a perfectly competitive firm, profit maximization (or loss minimization) occurs at the level of output at which

	a.	MR = MC.
	b.	MR = AVC.
	c.	P = ATC.
	d.	MR = ATC.

4 points

QUESTION 23

If MR > MC, then

	a.	profits are being maximized.
	b.	the firm is producing too much of the good to be maximizing profits.
	c.	the firm can increase its profits (or minimize its losses) by increasing output.
	d.	the firm must be incurring losses.

4 points

QUESTION 24

If firms are earning zero economic profits, they must be producing at an output level at which

	a.	price minus marginal cost.
	b.	total revenue equals total costs, in other words, normal profits.
	c.	price equals average variable cost.
	d.	marginal revenue equals marginal cost.
	e.	none of the above

4 points

QUESTION 25

In the theory of perfect competition,

	a.	the market demand curve is horizontal.
	b.	the single firm faces a horizontal demand curve.
	c.	the single firm faces a downward-sloping demand curve.
	d.	the market demand curve is downward sloping.
	e.	b and d

azureshark954

ECON 2100 Midterm: ECON 2100 Kennesaw State ECON2100 Fall2018 Exam3B Key

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