QUESTION 1

1. In an imperfectly competitive industry,

A) a single firm has no control over the price of its output.

B) a single firm has some control over the price of its output.

C) a single firm will be able to sell all of its output at whatever price it wants to charge.

D) the government will always regulate the output price.

QUESTION 2

1. Monopolies, oligopolies, and monopolistic competitive industries all

A) earn positive profits in the long run.

B) have market power.

C) are completely unconstrained in their pricing.

D) raise price and quantity over what would occur in perfect competition in order to maximize their profits.

QUESTION 3

1. Imperfect competition and market power

A) are major sources of inefficiency.

B) result in higher output than in perfect competition.

C) are always the result of product differentiation.

D) result from diseconomies of scale.

QUESTION 4

1. Stereo Sound Unlimited has a monopoly over the installation of surround sound systems. If Stereo Sound Unlimited's total revenue from installing 10 sound systems is $20,000 and its total revenue from installing 11 sound systems is $18,000, what is the marginal revenue of the eleventh sound system?

QUESTION 5

1. Hi Phi Sound Unlimited has a monopoly over the installation of surround sound systems. If Hi Phi Unlimited's total revenue from installing 15 sound systems is $30,000 and its total revenue from installing 18 sound systems is $33,000, what is the marginal revenue of the eighteenth sound system?

Use the following diagram to answer questions (6)-(8).

QUESTION 6

1. The profit-maximizing level of output for this firm is

QUESTION 7

1. The monopoly price of the good at the profit-maximizing level of output for this firm is

QUESTION 8

1. If this firm is producing the profit-maximizing quantity and selling it at the profit-maximizing price, the firm's revenues will be

QUESTION 9

1. A form of industry structure characterized by a few firms each large enough to influence market price is

A) perfect competition.

B) monopolistic competition.

C) oligopoly.

D) monopoly.

Use the following information to answer questions (10)-(12).

Consider a monopoly facing a market demand corresponding to the equation: $150-0.6*Q, where P is the price level and Q is the total supply to the market. The production function of the technology operates according to: q=60+15*ln(w), where w is the unit of labor employed and q the level of production. The total cost of production follows equation: TC= q+q2. The following table summarizes the market conditions and the monopoly's production technology and cost structure.

QUESTION 10

1. What is the monopoly's profit maximizing level of production?

QUESTION 11

1. What is the monopoly's average total cost at the profit maximizing level of production?

QUESTION 12

1. What is the monopoly's revenue at the profit maximizing level of production?