Economics Homework Help

The reason a monopoly produces less than a competitive industry with identical costs is that:

A. in a

competitive industry there are more firms, which leaves more money available for production

B. there is not enough information to answer this question

C. competitive firms’ marginal revenue equal marginal cost, so the industry produces at the point at which demand and marginal cost cross instead of the point at which marginal revenue and marginal cost cross

D. monopolies are usually regulated industries, and the government limits production

E. production costs are always higher for monopolies than for competitive firms

A firm seeks to differentiate its products from others so as to

A. motivate employees by producing a unique product

B. maximize profits

C. sell more than its competitors

D. be proud of its product

E. minimize production costs

Advertising may do some of the following except:

A. mislead consumers into thinking one product is better than another

B. inform consumers of how a product is different from others

C. persuade individuals to continue buying a product even when they do not need it

D. inform consumers of a products existence

E. persuade people to try a product

Collusion is most likely to occur when

A. there are many firms in an industry

B. firms participate in a market sporadically

C. firms compete and interact over a long period of time

D. it is difficult to obtain information about other firms

E. firms have very little information about each other

If a monopolistically competitive firm is in long-run equilibrium, then

A. ATC=MR

B. AFC=MR

C. P=ATC and P>MC

D. P=ATC and P=MC

E. d=AR and AR = MR

Firms leave a monopolistically competitive industry when

A. other firms enter

B. average total cost is greater than marginal revenue

C. price is equal to marginal cost

D. marginal revenue exceeds marginal cost

E. average total cost is greater than price

In oligopoly, any action by one firm causes

A. no reaction by other firms

B. a reaction by other firms

C. a profit gain by other firms

D. a profit loss by other firms

E. a loss of market share by other firms

Product differentiation is

A. the ability of consumers to determine differences in different units of the same product

B. the existence of varying degrees of differences among similar items

C. the spin-off of one product line from another

D. an attempt by salespeople to make the products they sell appear different from products others sell

E. the opposite of production