← Microeconomics Test
5 Written Questions
5 Matching Questions
- In a perfectly competitive mkt. if (price) AR<AVC or equal to what should the firm do?
- How do you figure profit in a monopoly?
- A monopoly like perfect competition mazimizes profits at a point where MR=MC? T or F
- What is another name for zero economic profit?
- Is selling cheaper in U.S. then in RUssia price discrimination?
- a Shut Down
- b TR - TC or (P- ATC) xQ
- c Normal rate of return
- d True
- e Yes
5 Multiple Choice Questions
- Downward sloping
- delivery of first-class mail
- ATC x Q
- perfectly elastic demand curve
- the firm is earning zero economic profits and is covering explicit and implicit costs
5 True/False Questions
What happens to price in the longrun if firms are making economic profits in a perfectly competitive mkt.? → does not lead to shortages as long as price is above marginal cost
In a monopoly what are the barriers to entry? → 1.Legal barriers-franchising, licensing, patents 2.Economies of Scale3. Contorl of important inputs4. pricing and other strategic barriers
Does a monopoly firm always earn an economic profit? → Yes they do
At what point is profit maximized in a monopoly? → At any point UP TO where MR=MC...P will always be above MC in a monoply
In a perfectly competitive mkt. equilibrium, max production and max profits aoocur at what point? → When MR=MC