Understanding Perfect Competition and Monopoly: Quiz Guide
School
University of Saskatchewan**We aren't endorsed by this school
Course
ECON 111
Subject
Economics
Date
Dec 10, 2024
Pages
3
Uploaded by AdmiralKuduPerson1215
MODULE 05: Perfect Competition and Monopoly SAMPLE QUIZ QUESTIONS 1.Suppose the price is P1. The optimal output is ________ and profits are _______. oQ1; zero oQ1; negative oQ1; positive o0; negative 2.Suppose the price is P2. The optimal output is ________ and profits are _______. oQ2; zero oQ2; positive oQ2; negative o0; negative 3.Suppose the price is P3. The optimal output is ________ and profits are _______. oQ3; zero oQ3; positive oQ3; negative o0; negative 4.Suppose the price is P4. The optimal output is ________ and profits are _______. oQ4; zero oQ4; positive oQ4; negative o0; negative 5.Suppose the price is P5. The optimal output is ________ and profits are _______. oQ5; zero oQ5; positive oQ5; negative o0; negative Price ($),Costs ($) Quantity Marginal CostAverage CostAverage Variable CostP1 P2 P3 P4 P5 Q1 Q2 Q3 Q4 Q5 Q=0
6.The supply curveis the __________ above price _________. oMarginal cost curve ; p2oAverage variable cost curve ; p3oMarginal cost curve ; p4oAverage cost curve ; p27.The firm’s breakeven priceis _________. oP1oP2oP3oP48.The firm’s shutdown priceis _________. oP1oP2oP3oP49.Suppose wages fell for this firm and the price was P2, then output would ______ and profits would be ___. ofall; be unchanged ofall; negative orise; positive orise; zero 10.Suppose the firm instituted better management techniques that improved productivity, then average variable costs would ______ and the firm’s breakeven price would ______. ofall; fall ofall; rise orise; fall orise; rise 11.Suppose fixed costs for the firm rose (say to a rise in rent for their office), the firm’s shutdown pricewill _________. ofall orise obe unchanged odepend on how much it changed by 12.Suppose fixed costs for the firm rose (say to a rise in rent for their office), the firm’s breakeven pricewill _________. ofall orise obe unchanged odepend on how much it changed by
MONOPOLY 13.Consider the figure above for a Monopolist. The monopolist’s optimal output is ________. oQ1oQ2oQ3o0 14.Consider the figure above for a Monopolist. The monopolist’s optimal price is ________. oP1oP2oP3o0 15.Consider the figure above for a Monopolist. A rise in productivity will ____.output and ____.prices. oraise; raise oraise; lower olower; raise olower; lower 16.Consider the figure above for a Monopolist. At the monopolist’s optimal output, profits are ________. onegative o0 oPositive oUndetermined as it depends on fixed costs 17.Consider the figure above for a Monopolist. The monopolist’s optimal output ________. oIs efficient since it maximizes profits oIs inefficient since it creates a deadweight loss oMaximizes social welfare oFails to account for externalities Price ($), Quantity Marginal CostAverage CostAverage Variable CostP1 P2 P3 Q1 Q2 Q3 Q=0DEMANDMARGINAL REVENUE