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5 Written Questions

5 Matching Questions

  1. Why does a monopoly continue to make profits in the long run while an industry in perfect competition cannot?
  2. Why is allocative efficiency not achieved in a monopoly?
  3. What happens to price in the longrun if firms are making economic losses in a perfectly competitive mkt.?
  4. Is a stock market a perfectly competitive market?
  5. Patent
  1. a P(what product is worth to consumers) > MC (what the resources used to make the product are worth)
  2. b In perfect competition if profits are being made other firms will enter the industry bringing prices down. In a monoply no new firms can enter due to barriers, therefore the monoply will continue to make profits.
  3. c YES
  4. d An exclusive right of inventors to produce and sell a new product or machine for 20 years from the time of application
  5. e Firms leave the industry and the price goes up

5 Multiple Choice Questions

  1. Economies of Mass production
  2. It is above the MR curve and is the SAME as the demand curve because the firm and the industry are one.
  3. the firm is earning zero economic profits and is covering explicit and implicit costs
  4. behave more like a perfectly competitive firm
  5. More firms enter and this pushes the price down

5 True/False Questions

  1. In a perfectly competitive mkt. if TR>TVC or equal to what should the firm do?shut down now


  2. Is selling at higher rates to business travelers price discrimination?Economies of Mass production


  3. WHY do costs differ between perfect competion industry and monpoly industry?ATC x Q


  4. If the monoplist increases output, what will the price do?Yes they do


  5. What is equal to Price in a perfectly competitive mkt.?P=MR=AR=D


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