Question

14. A monopolistic competition firm

a. chooses Q based on MR=MC rule

b. has an ATC that is a straight line upward sloping graph

c. makes positive economic profit in the long run

d. has no idle capacity

13. A market may look like:

a. an oligopoly set up made of one firm

b. monopolistic competition made of one firm

c. monopoly made of one firm

d. perfect competition made up of one firm

12. In the case of duopoly

a. price-wars can lead to almost competitive prices

b. collusion can lead to almost monopoly prices

c. both a and b are possible

d. only one price prevails and that is one set up by government

10. Game theory that is applied to solve for an equilibrium in an oligopoly set up uses:

a. the fact that with few players, each player will try to understand what other players are likely to do, and then make a decision about his/her own plan of action

b. strategies to solve for equilibrium

1. The marginal revenue curve for a monopolist _____ the market demand curve.

a. always rises above

b. always lies beneath

c. always run parallel

d. always is the same

c. none of the above

d. both and b

Answer 1

14. A monopolistic competition firm a. chooses Q based on MR=MC rule

13. A market may look like: c. monopoly made of one firm

12. In the case of duopoly . both a and b are possible

10. Game theory that is applied to solve for an equilibrium in an oligopoly set up uses: a. the fact that with few players, each player will try to understand what other players are likely to do, and then make a decision about his/her own plan of action

1. The marginal revenue curve for a monopolist b. always lies beneath the market demand curve.