Question 1

Product differentiation

Accepted Answer

A)  is possibly welfare enhancing if new products match consumer preferences better. 
B)  is welfare reducing even if new products match consumer preferences better. 
C)  is welfare enhancing even if new products do not match consumer preferences better. 
D)  is welfare reducing even if new products do not match consumer preferences better. 
A)  is possibly welfare enhancing if new products match consumer preferences better. 
B)  is welfare reducing even if new products match consumer preferences better. 
C)  is welfare enhancing even if new products do not match consumer preferences better. 
D)  is welfare reducing even if new products do not match consumer preferences better.

Question 2

The evidence on mergers occurring within the hospital industry suggests that

Accepted Answer

A)  efficiency gains that resulted have been passed on to customers through lower prices. 
B)  the mergers have tended to not have any significant effect on hospital prices. 
C)  prices have risen slightly as some efficiency gains are passed on to customers after mergers. 
D)  prices have risen after mergers. 
A)  efficiency gains that resulted have been passed on to customers through lower prices. 
B)  the mergers have tended to not have any significant effect on hospital prices. 
C)  prices have risen slightly as some efficiency gains are passed on to customers after mergers. 
D)  prices have risen after mergers.

Question 3

Explain why the intersection of the best-response functions is the Cournot equilibrium.

Accepted Answer

On a best-response function,a firm selec

Question 4

Suppose a monopolistically competitive industry evolved into a perfectly competitive industry.Which of the following statements is correct?

Accepted Answer

A)  The industry would produce more output and charge a lower price after the change. 
B)  The industry would produce at decreasing returns to scale. 
C)  Elasticity of demand for the firm's product would remain the same after this change occurred. 
D)  This industry would produce the same level of output at lower prices in the long run than before the change. 
A)  The industry would produce more output and charge a lower price after the change. 
B)  The industry would produce at decreasing returns to scale. 
C)  Elasticity of demand for the firm's product would remain the same after this change occurred. 
D)  This industry would produce the same level of output at lower prices in the long run than before the change.

Question 5

There are only two firms in an industry with demand curves q1 = 30 - P and q2 = 30 - P.Both have no fixed costs and each has a marginal cost of 10 per unit produced.If they behave as profit-maximizing price takers,each produces 10 units and sells them at a price of 10 so that each firm makes zero economic profits.If they form a cartel,their inverse demand curve is

Accepted Answer

A)  Q = 30 - P. 
B)  Q = 60 - 2P. 
C)  P = 60 - 2Q. 
D)  P = 30 - Q/2. 
A)  Q = 30 - P. 
B)  Q = 60 - 2P. 
C)  P = 60 - 2Q. 
D)  P = 30 - Q/2.

Question 6

Which of the following market models results in the highest level of consumer surplus assuming a fixed number of firms with identical costs and a given demand curve?

Accepted Answer

A)  Cournot 
B)  Stackelberg 
C)  Monopoly 
D)  Cartel 
A)  Cournot 
B)  Stackelberg 
C)  Monopoly 
D)  Cartel

Question 7

Which of the following conditions can help prolong the life of a cartel?

Accepted Answer

A)  There are only a few firms in the market and they all belong to the cartel. 
B)  There are many firms in the market that are not members of the cartel. 
C)  It is difficult to know what price any cartel member is actually charging. 
D)  The cartel has no ability to punish members who cheat on the cartel. 
A)  There are only a few firms in the market and they all belong to the cartel. 
B)  There are many firms in the market that are not members of the cartel. 
C)  It is difficult to know what price any cartel member is actually charging. 
D)  The cartel has no ability to punish members who cheat on the cartel.

Question 8

The number of firms in a monopolistically competitive market will be smaller if

Accepted Answer

A)  the market demand curve shifts rightward. 
B)  the minimum efficient scale is lower. 
C)  fixed costs are smaller. 
D)  fixed costs are larger. 
A)  the market demand curve shifts rightward. 
B)  the minimum efficient scale is lower. 
C)  fixed costs are smaller. 
D)  fixed costs are larger.

Product differentiation

The evidence on mergers occurring within the hospital industry suggests that

Explain why the intersection of the best-response functions is the Cournot equilibrium.

Suppose a monopolistically competitive industry evolved into a perfectly competitive industry.Which of the following statements is correct?

Which of the following market models results in the highest level of consumer surplus assuming a fixed number of firms with identical costs and a given demand curve?

Which of the following conditions can help prolong the life of a cartel?

The number of firms in a monopolistically competitive market will be smaller if

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 13: Oligopoly and Monopolistic Competition

Product differentiation

The evidence on mergers occurring within the hospital industry suggests that

Explain why the intersection of the best-response functions is the Cournot equilibrium.

Suppose a monopolistically competitive industry evolved into a perfectly competitive industry.Which of the following statements is correct?

Which of the following market models results in the highest level of consumer surplus assuming a fixed number of firms with identical costs and a given demand curve?

Which of the following conditions can help prolong the life of a cartel?

The number of firms in a monopolistically competitive market will be smaller if

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters