If the price declines, the minimum quantity of output supplied

| June 14, 2018

Part 2 of 4 – Short-Run Costs

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Question 19 of 29

5.0 Points

(Exhibit: Short-Run Costs) At the given price, the
most profitable level of output occurs at quantity:

A.N

B.P

C.S

D.T

Question 20 of 29

5.0 Points

(Exhibit:
Short-Run Costs) If the price declines, the minimum quantity of output supplied
in the short run is quantity:

A.O.

B.Q.

C.R.

D.S.

Question 21 of 29

5.0 Points

(Exhibit:
Short-Run Costs) If the price declines, production will continue in the short
run, even though the firm incurs a loss, between quantities:

A.O and Q.

B.Q and R.

C.R and S.

D.S and T.

Question 22 of 29

5.0 Points

(Exhibit:
Short-Run Costs) This firm’s supply curve begins at quantity:

A.Q.

B.R.

C.S.

D.T.

Part 3 of 4 – Profit Maximization in Monopolistic
Competition

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Question 23 of 29

5.0 Points

(Exhibit:
Profit Maximization in Monopolistic Competition) A firm in monopolistic
competition will maximize profits by producing the level of output where:

A.P = MC

B.MR = MC

C.P = MR

D.price minus ATC (i.e., economic profit per unit) is
the largest.

Question 24 of 29

5.0 Points

(Exhibit:
Profit Maximization in Monopolistic Competition) In the short run, a firm in
monopolistic competition may experience economic profits as shown in Panel (a)
as the distance:

A.PS.

B.PS times the quantity 0M.

C.PS times the quantity Q.

D.PT times the quantity Q.

Question 25 of 29

5.0 Points

(Exhibit: Profit Maximization in Monopolistic
Competition) If other firms see economic profits in the industry, they will
enter it, and the demand curve for firms already in the industry will shift
to the ________ ; in the long run, this will result in economic profit
_______ and price _______ .

A.right; = 0; = ATC; = minimum ATC

B.right; > 0; > ATC

C.left; < 0; < ATC D.left; = 0; = ATC; > minimum ATC

Question 26 of 29

5.0 Points

(Exhibit:
Profit Maximization in Monopolistic Competition) In monopolistic competition,
long-run equilibrium is characterized by:

A.P > MR.

B.P < MR. C.P = MR. D.profit maximization, which occurs where P = MR = MC. Question 27 of 29 5.0 Points (Exhibit: Profit Maximization in Monopolistic Competition) In Panel (a), if the firm raises its price above P, it will: A.lose all its customers. B.still have some customers. C.not lose any customers. D.have none of the above occur. Question 28 of 29 5.0 Points (Exhibit: Profit Maximization in Monopolistic Competition) In determining the price in monopolistic competition: A.the price to the firm is given by supply and demand for the industry. B.the firm is a price taker. C.the firm applies the marginal decision rule. D.A and B are true.

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