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.Management Sciences
Category: Profit Maximizing Under Perfect Competition And Monopoly
The formula for average variable cost (AVC) is ?
A. DTVC/Dq
B. q/TVC
C. Dq/DTVC
D. TVC/q
If firms can neither enter nor leaves an industry, the relevant time period is the ?
A. immediate run
B. intermediate run
C. long run
D. short run
Profit-maximizing firms want to maximize the difference between ?
A. marginal revenue and marginal cost.
B. total revenue and total cost
C. total revenue and marginal cost
D. marginal revenue and average cost
The short run, as economists use the phrase, in characterized by ?
A. at least one fixed factor of production and firms neither leaving nor entering the industry.
B. no variable inputs – that is, all of the factors of production are fixed
C. all inputs being variable
D. a period where the law of diminishing returns does not hold
In a monopoly, marginal revenue is ?
A. lower than price for all units other than the first
B. less than price at low levels of output and greater than price at high levels of output
C. always greater than price
D. always equal to price
When one firm in the breakfast cereal market started an advertising campaign that stressed the nutritional value of its cereals, all other cereal manufacturers started similar advertising campaign This suggests that the breakfast cereal market is ?
A. monopolistically competitive
B. oligopolistic
C. perfectly competitive
D. indeterminate from this information
Form society’s point of view, society would be better off if a monopolist ?
A. produced less and charged a higher price
B. produced more and charged a higher price
C. produced more and charged a lower price
D. produced less and charged a lower price.
An oligopoly with a dominant price leader will produce a level of output ?
A. equal to what a monopolist would choose in the same industry
B. between that which would prevail under competition and that which a monopolist would choose in the same industry
C. that would prevail under competition
D. between that which would prevail under competition and that which a monopolistic competitor would choose in the same industry.
If you were running a firm in a perfectly competitive industry, you would be spending your time making decisions on ?
A. how much to spend on advertising?
B. how much of each input to use?
C. What price to charge
D. none of these
A monopolistically competitive firm that is incurring a loss will produce as long as the price that the firm charges is sufficient to cover ?
A. marginal costs
B. fixed costs
C. variable costs
D. advertising costs
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