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- 1. Multiple Choice
Which of the following could attract new firm to join an industry?
Normal profits
Economic losses
Economic profits
Accounting profits
- 2. Multiple Choice
A firm operating in a perfectly competitive market will shut down when price is below the minimum of a(n) ____________.
marginal cost curve
average total cost curve
average fixed cost curve
average variable cost curve
- 3. Multiple Choice
A perfect competitive firm charges a price that is ____________.
different to other firms
higher than other firms
lower than other firms
similar to other firms
- 4. Multiple Choice
A firm faces a perfectly elastic demand curve, if _____________.
MC = MR
MR = AR
AR = MC
ATC = AVC
- 5. Multiple Choice
Which of the following describes a monopoly firm?
Single seller
Many sellers
Many substitutes
No barrier to entry
- 6. Multiple Choice
If a monopoly firm practices price discrimination the firm will _____________.
earn smaller profit
produce lower quantity than before price discrimination
charge a higher price when demand is inelastic and a lower price when demand is elastic
charge a higher price when demand is elastic and a lower price when demand is inelastic
- 7. Open Ended
Identify the profit maximizing level of output for this monopoly firm.
- 8. Open Ended
Identify the profit maximizing level of price for this monopoly firm.
- 9. Open Ended
Based on the following graph, calculate the total profit earns by this firm.
- 10. Open Ended
List two (2) characteristics of monopoly firm.
- 11. Open Ended
Based on the following graph, identify the market structure the firm is operating in.
- 12. Open Ended
Based on the following graph, label i.
- 13. Open Ended
Based on the following graph, label h.
- 14. Open Ended
Determine the profit at equilibrium. State the type of profit.
- 15. Open Ended
Based on the following graph, should the firm continue or shut down its operation? Why?
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