Econ 323 Exam 3

question

Assume that a profit maximizing monopolist is producing a quantity such that marginal cost exceed marginal revenue. We can conclude that

answer

firm's output is larger than the profit maximizing quantity

question

suppose that a firm can produce its output at either of two plants. if profits are maximized which of the following statements is true

answer

(all of the above)
the MC at the second plant must equal MR
the MC at the first plant must equal MR
the MC at the two plants must be equal

question

the monopolist has no supply curve because

answer

the quantity supplied at any particular price depends on the monopolist's demand curve (because demand curve shapes MR curve)

question

which of the following is true at the output level where p=mc?

answer

the monopolist is not maximizing profit and should decrease output

question

monopoly power results from the ability to

answer

set price above MC

question

the cournot equilibrium can be found by treating ______ as a pair of simultaneous equations and by finding the combination of Q1 and Q2 that satisfy both equations

answer

? the best response functions for firms 1 and 2

question

the larger the lerner index the greater is the pricing power of a monopolist (t or f)

answer

true

question

a profit maximizing monopoly will produce that output for which

answer

marginal cost equals marginal revenue

question

for price discrimination to be successful using coupons

answer

shoppers who take advantage of coupons have more elastic demands than shoppers who don't use them

1 of 9

question

Assume that a profit maximizing monopolist is producing a quantity such that marginal cost exceed marginal revenue. We can conclude that

answer

firm's output is larger than the profit maximizing quantity

question

suppose that a firm can produce its output at either of two plants. if profits are maximized which of the following statements is true

answer

(all of the above)
the MC at the second plant must equal MR
the MC at the first plant must equal MR
the MC at the two plants must be equal

question

the monopolist has no supply curve because

answer

the quantity supplied at any particular price depends on the monopolist's demand curve (because demand curve shapes MR curve)

question

which of the following is true at the output level where p=mc?

answer

the monopolist is not maximizing profit and should decrease output

question

monopoly power results from the ability to

answer

set price above MC

question

the cournot equilibrium can be found by treating ______ as a pair of simultaneous equations and by finding the combination of Q1 and Q2 that satisfy both equations

answer

? the best response functions for firms 1 and 2

question

the larger the lerner index the greater is the pricing power of a monopolist (t or f)

answer

true

question

a profit maximizing monopoly will produce that output for which

answer

marginal cost equals marginal revenue

question

for price discrimination to be successful using coupons

answer

shoppers who take advantage of coupons have more elastic demands than shoppers who don't use them

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Econ 323 Exam 3

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