1 A profit-maximizing firm picks the quantity of output at which ________A average revenue, B Price or C marginal revenue Equals __________A average cost or B marginal cost
2 When a monopolized industry becomes monopolistically? competitive, consumers pay
A
less for goods and? services, and firms earn lower profits
B
less for goods and? services, and firms earn higher profits
C
more for goods and? services, and firms earn lower profits
D
more for goods and? services, and firms earn higher profits
3 In a monopolistically competitive? market, firms continue entering the market until
A
economic profits equal zero
B
economic profits turn positive
C
government stops granting licenses
D
government starts granting licenses
4 Compared to a perfectly competitive? market, average costs in a monopolistically competitive market are
A
higher due to the efficiency of many firms providing the same product
B
lower due to the cost of many firms providing differentiated products
C
lower due to the efficiency of many firms providing the same product
D
higher due to the cost of many firms providing differentiated products
5Word-of-Mouth Book Sales Consider a publisher who earns a profit of ?$2 per book sold An advertisement that costs ?$340, 000 would sell 120, 000
books directly
To make the advertisement? worthwhile, how many of the original buyers must each persuade just one other person to buy the? book?
6 Firm A has lowered its price from? $2999 to? $2499 In a? tit-for-tat situation, firm B will
A
lower its price to? $2499
B
lower its price to? $1999
C
keep its price at? $2999
D
raise its price to? $3499
7 At a natural? monopolist’s current level of? output, marginal revenue is less than marginal cost The firm should Araise or B lower it’s output and A raise or B lower the price
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