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5 Written questions

5 Matching questions

  1. If the monopolists reduces output, what will the price do?
  2. Why is allocative efficiency not achieved in a monopoly?
  3. What is the Optimal Output Rule in a perfectly competitive mkt.?
  4. WHo had/has a monopoly on diamonds?
  5. In a perfectly competitive mkt. a firm oculd be doing what in the shortrun?
  1. a earning profits, generating losses, breaking even.
  2. b MR=MC Profit is maximized by producing the quantity for which the marginal cost is equal to the marginal revenue
  3. c De Beers
  4. d P(what product is worth to consumers) > MC (what the resources used to make the product are worth)
  5. e The price will rise.

5 Multiple choice questions

  1. An exclusive right of inventors to produce and sell a new product or machine for 20 years from the time of application
  2. Yes they do
  3. large number of buyers and sellers, homogenous (standardized) product, no barriers to new firms entering mkt., firms are price takers and have a perfectly elastic demand.
  4. It is at the point where marginal revenue equals marginal cost (MR=MC) pg. 208)
  5. It is above the MR curve and is the SAME as the demand curve because the firm and the industry are one.

5 True/False questions

  1. What happens to price in the longrun if firms are making economic losses in a perfectly competitive mkt.?Normal rate of return


  2. Are coupons price discriminators?Above MC yet in the elastic region


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


  4. Natural monopolyAN industry inwhich economies of scale are so great that a single firm can produce the product at a lower average totalo cost then would be possible if more then one firm produced the product]


  5. Are monopolys efficient?Ability to control output nad price


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