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    Quiz 2

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    Yazmine Aliyah A. Caoile
    This document contains a 10 question quiz on monopoly, oligopoly, and monopolistic competition market structures. The questions assess understanding of profit maximization, long run equilibrium, and product variety across different market structures. The key provided identifies the source and difficulty level for each question.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Quiz 2

    Uploaded by

    Yazmine Aliyah A. Caoile
    177 views5 pages
    This document contains a 10 question quiz on monopoly, oligopoly, and monopolistic competition market structures. The questions assess understanding of profit maximization, long run equilibrium, and product variety across different market structures. The key provided identifies the source and difficulty level for each question.

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    quiz-2

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    This document contains a 10 question quiz on monopoly, oligopoly, and monopolistic competition market structures. The questions assess understanding of profit maximization, long run equilibrium, and product variety across different market structures. The key provided identifies the source and difficulty level for each question.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    177 views5 pages

    Quiz 2

    Uploaded by

    Yazmine Aliyah A. Caoile
    This document contains a 10 question quiz on monopoly, oligopoly, and monopolistic competition market structures. The questions assess understanding of profit maximization, long run equilibrium, and product variety across different market structures. The key provided identifies the source and difficulty level for each question.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    Quiz #2

    Student: ___________________________________________________________________________

    1. You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C
    = 5 + 30Q. The profit-maximizing output for your firm is
    A. 4.
    B. 5.
    C. 6.
    D. 7.

    2. You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C
    = 5 + 30Q. The profit-maximizing price is
    A. 150.
    B. 90.
    C. 130.
    D. 110.

    3. You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C
    = 5 + 30Q. Your firm's maximum profits are
    A. 495.
    B. 475.
    C. 480.
    D. 415.

    4. Which of the following features is common to both perfectly competitive markets and monopolistically
    competitive markets?
    A. Firms produce homogeneous goods.
    B. There is free entry.
    C. Long run profits are zero.
    D. There is free entry and long run profits are zero.

    5. Let the demand function for a product be Q = 100 - 2P. The inverse demand function of this demand function
    is:
    A. Q = 100 + 2P.
    B. P = 50 - 0.5Q.
    C. P = 50 + 0.5Q.
    D. none of the statements associated with this question are correct.
    6. In the long-run, monopolistically competitive firms produce a level of output such that
    A. P > MC.
    B. P = ATC.
    C. ATC > minimum of average costs.
    D. all of the statements associated with this question are correct.
    E.

    7. You are a manager for a monopolistically competitive firm. From experience, the profit-maximizing level of
    output of your firm is 100 units. However, it is expected that prices of other close substitutes will fall in the near
    future. How should you adjust your level of production in response to this change?
    A. Produce more than 100 units.
    B. Produce less than 100 units.
    C. Produce 100 units.
    D. Insufficient information to decide.

    8. In a competitive industry with identical firms, long run equilibrium is characterized by


    A. P = AC.
    B. P = MC.
    C. MR = MC.
    D. All of the statements associated with this question are correct.

    9. Which of the following market structures would you expect to yield the greatest product variety?
    A. Monopoly.
    B. Monopolistic Competition.
    C. Bertrand Oligopoly.
    D. Perfect Competition.

    10. Which of the following is true under monopolistic competition in the long run?
    A. profits are always zero.
    B. P > MC.
    C. P = MR.
    D. all of the choices are true in monopolistic competition.
    E.

    Quiz #2 Key
    1. You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C
    = 5 + 30Q. The profit-maximizing output for your firm is
    A. 4.
    B. 5.
    C. 6.
    D. 7.

    Baye - Chapter 08 #7
    Difficulty: Medium

    2. You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C
    = 5 + 30Q. The profit-maximizing price is
    A. 150.
    B. 90.
    C. 130.
    D. 110.

    Baye - Chapter 08 #8
    Difficulty: Medium

    3. You are the manager of a monopoly that faces a demand curve described by P = 230 - 20Q. Your costs are C
    = 5 + 30Q. Your firm's maximum profits are
    A. 495.
    B. 475.
    C. 480.
    D. 415.

    Baye - Chapter 08 #9
    Difficulty: Medium

    4. Which of the following features is common to both perfectly competitive markets and monopolistically
    competitive markets?
    A. Firms produce homogeneous goods.
    B. There is free entry.
    C. Long run profits are zero.
    D. There is free entry and long run profits are zero.

    Baye - Chapter 08 #38


    Difficulty: Medium
    5. Let the demand function for a product be Q = 100 - 2P. The inverse demand function of this demand function
    is:
    A. Q = 100 + 2P.
    B. P = 50 - 0.5Q.
    C. P = 50 + 0.5Q.
    D. none of the statements associated with this question are correct.

    Baye - Chapter 08 #46


    Difficulty: Medium

    6. In the long-run, monopolistically competitive firms produce a level of output such that
    A. P > MC.
    B. P = ATC.
    C. ATC > minimum of average costs.
    D. all of the statements associated with this question are correct.
    E.

    Baye - Chapter 08 #49


    Difficulty: Medium

    7. You are a manager for a monopolistically competitive firm. From experience, the profit-maximizing level of
    output of your firm is 100 units. However, it is expected that prices of other close substitutes will fall in the near
    future. How should you adjust your level of production in response to this change?
    A. Produce more than 100 units.
    B. Produce less than 100 units.
    C. Produce 100 units.
    D. Insufficient information to decide.

    Baye - Chapter 08 #66


    Difficulty: Medium

    8. In a competitive industry with identical firms, long run equilibrium is characterized by


    A. P = AC.
    B. P = MC.
    C. MR = MC.
    D. All of the statements associated with this question are correct.

    Baye - Chapter 08 #13


    Difficulty: Easy
    9. Which of the following market structures would you expect to yield the greatest product variety?
    A. Monopoly.
    B. Monopolistic Competition.
    C. Bertrand Oligopoly.
    D. Perfect Competition.

    Baye - Chapter 08 #29


    Difficulty: Easy

    10. Which of the following is true under monopolistic competition in the long run?
    A. profits are always zero.
    B. P > MC.
    C. P = MR.
    D. all of the choices are true in monopolistic competition.
    E.

    Baye - Chapter 08 #108


    Difficulty: Easy

    Quiz #2 Summary

    Category # of Questions
    Baye - Chapter 08 10
    Difficulty: Easy 3
    Difficulty: Medium 7
     

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