Question 1

Exhibit 10-7
 
-At the profit-maximizing output level,the firm in Exhibit 10-7 is

Accepted Answer

The answer of Exhibit 10-7
 
-At the profit-maximizing output level,the...

Question 2

Exhibit 10-6
 
-In Exhibit 10-6,what is the maximum profit this monopolistic competitor can earn in the short run?

Accepted Answer

The answer of Exhibit 10-6
 
-In Exhibit 10-6,what is the...

Question 3

A rise in demand for restaurant meals is likely to cause which of the following in the short run?

Accepted Answer

The answer of A rise in demand for restaurant meals...

Question 4

Exhibit 10-3
 
-The profit-maximizing price for the firm in Exhibit 10-3 is

Accepted Answer

The profit maximizing price for the firm is where Marginal Revenue (MR) equals Marginal Cost (MC). At a price of $21, the quantity demanded is 6, which means a total revenue of $126. At a quantity of 6, the MC of producing an additional unit is also $21. Thus, the profit maximizing price is $21.

Question 5

Exhibit 10-9
 
-If the firm in Exhibit 10-9 produces 100 units of output,it will have

Accepted Answer

The answer of Exhibit 10-9
 
-If the firm in Exhibit...

Question 6

Exhibit 10-7
 
-At the profit-maximizing output level,total cost for the firm in Exhibit 10-7 is approximately

Accepted Answer

At profit-maximizing output level, the firm produces 800 units where MC=MR.
At this output level, TC is approximately $4,940, which is the sum of TVC and TFC.
Therefore, the answer is D.

Question 7

A monopolistically competitive firm is producing an output level at which marginal revenue is less than marginal cost.This firm should _____ quantity and _____ price to increase profit or reduce losses.

Accepted Answer

If a monopolistically competitive firm is producing an output level where marginal revenue is less than marginal cost, it means that the firm is not maximizing profit yet. To increase profit or reduce losses, the firm should decrease its quantity of output to where marginal revenue equals marginal cost. However, since the firm operates in a monopolistically competitive market, it cannot simply increase its price without losing too many customers to its competitors. Therefore, the firm should increase its price only to a certain extent that will not drive away all its customers. Hence, the best option is to decrease quantity and increase price.

Question 8

Exhibit 10-8
 
-Assume the firm in Exhibit 10-8 is currently charging price P and producing output level Q.In order to maximize profit (or minimize loss),the firm should

Accepted Answer

In order to maximize profit, the firm should decrease the price and increase the output level. This is because the current price is above the market equilibrium price which means that consumers are willing to buy more goods at a lower price. By decreasing the price, the firm can increase the demand for their product and potentially make up for the decrease in price through increased sales. Similarly, by increasing the output level, the firm can meet the potential increase in demand from lowering the price.

Question 9

Exhibit 10-6
 
-In Exhibit 10-6,what is the profit-maximizing price for this monopolistic competitor in the short run?

Accepted Answer

The answer of Exhibit 10-6
 
-In Exhibit 10-6,what is the...

Question 10

Exhibit 10-5
 
-In the short run,the firm in Exhibit 10-5 should

Accepted Answer

The answer of Exhibit 10-5
 
-In the short run,the firm...

Question 11

In the short run,a monopolistically competitive firm is

Accepted Answer

In the short run, a monopolistically competitive firm will either earn a positive economic profit, negative economic profit (economic loss), or zero economic profit depending on the demand and cost conditions of the market. There is no guarantee of any particular level of profit or loss.

Question 12

A monopolistically competitive firm is producing an output level at which marginal revenue is greater than marginal cost.This firm should _____ quantity and _____ price to increase profit or reduce losses.

Accepted Answer

A monopolistically competitive firm should increase its output to maximize profit, which means increasing its quantity. However, since the firm is already producing at a level where marginal revenue is greater than marginal cost, it should not increase the price, but rather decrease the price to increase total revenue and therefore profit. Therefore, the best choice is B, increase quantity and decrease price.

Question 13

Exhibit 10-4
 
-In the short run,which of the following should the firm in Exhibit 10-4 do?

Accepted Answer

The answer of Exhibit 10-4
 
-In the short run,which of...

Question 14

Exhibit 10-3
 
-At the profit-maximizing output,the firm in Exhibit 10-3 is earning

Accepted Answer

The answer of Exhibit 10-3
 
-At the profit-maximizing output,the firm...

Question 15

If a monopolistically competitive firm can earn a profit,it will adjust production until

Accepted Answer

A monopolistically competitive firm will maximize profits where MR (marginal revenue) equals MC (marginal cost). This is because producing one more unit of output will only be profitable if the additional revenue generated (marginal revenue) is greater than the cost of producing that unit (marginal cost). Therefore, producing up to the point where MR=MC will give the firm the largest possible profit.

Question 16

Exhibit 10-7
 
-Assume that the firm in Exhibit 10-7 is maximizing profit.Its total revenue is

Accepted Answer

To find the total revenue, we need to multiply the price by the quantity sold. Looking at the exhibit, we can see that the quantity sold at a price of $5 is 1,000 units, and the quantity sold at a price of $6 is 600 units. Therefore, the total revenue is:

(1,000 units x $5) + (600 units x $6) = $5,000 + $3,600 = $8,600

Since the firm is maximizing profit, it is producing at the point where marginal revenue equals marginal cost. From the exhibit, we can see that the marginal cost is $5 at a quantity of 1,000 units and increases to $6 at a quantity of 600 units. Therefore, the firm is producing 1,000 units and charging a price of $5 per unit, resulting in total revenue of $5,000.

Question 17

Exhibit 10-3
 
-At the profit-maximizing output,the monopolistically competitive firm in Exhibit 10-3 is in

Accepted Answer

The answer of Exhibit 10-3
 
-At the profit-maximizing output,the monopolistically...

Question 18

Assume a monopolistically competitive firm is earning an economic profit.The marginal revenue from selling an additional unit is $30 and the marginal cost of producing that additional unit is $23.The firm should

Accepted Answer

If the firm is earning economic profit, it means that its price exceeds its average total cost. In this case, the marginal revenue of producing the next unit is $30, which is greater than the marginal cost of $23. Therefore, the firm should continue producing and selling more units to increase its profit even further. To do so, the firm needs to reduce its price to attract more customers, and increase its output level to meet the higher demand. Hence, B) is the correct answer.

Question 19

In both monopolistic competition and non-price-discriminating monopoly,

Accepted Answer

In both monopolistic competition and non-price-discriminating monopoly, the marginal revenue curve lies below the demand curve. This is because the firm's ability to increase sales by lowering prices is limited due to the presence of competitors in monopolistic competition and the absence of perfect substitutes in non-price-discriminating monopoly. Therefore, the firm must lower its price on all units sold, resulting in a decrease in total revenue.

Question 20

Exhibit 10-9
 
-In order to maximize profit or minimize loss,the firm in Exhibit 10-9 should

Accepted Answer

The answer of Exhibit 10-9
 
-In order to maximize profit...

Quiz 10: Monopolistic Competition and Oligopoly

Exhibit 10-7 -At the profit-maximizing output level,the firm in Exhibit 10-7 is

Exhibit 10-6 -In Exhibit 10-6,what is the maximum profit this monopolistic competitor can earn in the short run?

A rise in demand for restaurant meals is likely to cause which of the following in the short run?

Exhibit 10-3 -The profit-maximizing price for the firm in Exhibit 10-3 is

Exhibit 10-9 -If the firm in Exhibit 10-9 produces 100 units of output,it will have

Exhibit 10-7 -At the profit-maximizing output level,total cost for the firm in Exhibit 10-7 is approximately

A monopolistically competitive firm is producing an output level at which marginal revenue is less than marginal cost.This firm should _ quantity and _ price to increase profit or reduce losses.

Exhibit 10-8 -Assume the firm in Exhibit 10-8 is currently charging price P and producing output level Q.In order to maximize profit (or minimize loss) ,the firm should

Exhibit 10-6 -In Exhibit 10-6,what is the profit-maximizing price for this monopolistic competitor in the short run?

Exhibit 10-5 -In the short run,the firm in Exhibit 10-5 should

In the short run,a monopolistically competitive firm is

A monopolistically competitive firm is producing an output level at which marginal revenue is greater than marginal cost.This firm should _ quantity and _ price to increase profit or reduce losses.

Exhibit 10-4 -In the short run,which of the following should the firm in Exhibit 10-4 do?

Exhibit 10-3 -At the profit-maximizing output,the firm in Exhibit 10-3 is earning

If a monopolistically competitive firm can earn a profit,it will adjust production until

Exhibit 10-7 -Assume that the firm in Exhibit 10-7 is maximizing profit.Its total revenue is

Exhibit 10-3 -At the profit-maximizing output,the monopolistically competitive firm in Exhibit 10-3 is in

Assume a monopolistically competitive firm is earning an economic profit.The marginal revenue from selling an additional unit is $30 and the marginal cost of producing that additional unit is $23.The firm should

In both monopolistic competition and non-price-discriminating monopoly,

Exhibit 10-9 -In order to maximize profit or minimize loss,the firm in Exhibit 10-9 should