Exam 11: Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Ben is a chicken farmer and is in a market that has no product differentiation. We know that for Ben's firm, its demand curve is not the market demand curve

In autumn, the Connecticut apple market is perfectly competitive. If market demandincreases-resulting, say, from a change in consumer taste-the demand curves faced by each individual firm will, in the long run

-If the diagrams in Exhibit K-2 represent a firm in the market,

The primary contribution of the Theory of Monopolistic Competition is the rationale it provides for product differentiation and advertising.

The rate of technological development is clearly faster under perfectly competitive market structures.

Aaron gave up a job as a tire rotator that paid $20,000 a year to start his own T-shirt business. The T-shirt company has the following revenues and costs: TR = $60,000; costof hiring employees = $40,000; cost of materials = $8,000; cost of rent and insurance =$6,000. According to these data, Aaron's business made a(n)

The monopolist produces at minimum average total cost to maximize efficiency.

When price falls in a perfectly competitive industry, each firm will

Your best friend advocates the forced break-up of large firms, such as General Motors and Ford, on the grounds that they have a lot of monopoly power which they use to charge inefficiently high prices. According to Schumpeter, would breaking apart these gigantic firms guarantee consumers lower prices?Explain.

As entry of new firms occurs in an existing monopolistically competitive industry, the

If some firms leave a monopolistic competitive market, the

Eggs are sold in five different markets. The price for a dozen eggs in market A is $3, in market B price is $1, in market C price is $2, in market D price is $5, and in market Eprice is $4. In which market is the market structure most likely to be monopoly?

If a monopolist lowers its price to increase sales from 100 to 200 units, then the

Ian McDonald owns a company that sells sleds in a perfectly competitive market. A lighter-than-normal snowfall has caused the market demand curve for sleds to shift to the left. In the short run, which of the following is likely to happen?

If a firm produces zero units of output,

-When the monopolist maximizes profit in Exhibit K-8, its average total cost is

Danny Sever owns an avocado grove and sells his avocados to wholesalers. Danny has absolutely no ability to select the price. We know then that he

If a monopoly finds that at the present level of production, marginal revenue exceeds marginal cost, the firm should

In the text, when the Nick Rudd Ice Company starts as a monopoly and then finally faces competition from a new entering ice company, its

In 2010 , the pizza market in Charleston, Illinois, was perfectly competitive. But almost overnight, one firm bought up all its competitors to become the monopoly in the Charleston pizza market. As a result,