1. Average revenue (AR)
occurs when MC = MR.
equals TR/Q.
is greater than price when economic profits are present.
does not appear in the model of perfect competition.
2. Monopolistic competition and oligopoly are examples of
monopoly.
perfect competition.
theories of consumer behavior.
imperfect competition.
the extreme cases on the market structure continuum.
3. Retail outlets operate in which of the following market structures?
perfect competition
monopolistic competition
oligopoly
monopoly
oligopsony
4. Which of the following is NOT an essential characteristic of monopolistic competition?
a small number of sellers
differentiated products
relatively easy entry
short-run profits
a very elastic demand curve
5. If a monopoly firm observes an increase in total revenue following a price increase, which of the following must be true?
MR > 0
MR < 0
MR = 0
MR = TR
6. A monopoly is
a single seller of a product with many close substitutes.
a single seller of a product with no close substitutes.
a single buyer of a product.
a common industry structure.
a market structure with a single seller and a single buyer.
7. A firm in a(n) industry will have the most elastic demand curve.
monopolistic
oligopolistic
monopolistically competitive
perfectly competitive
8. If a firm is making an economic profit, then
the factors of production are being paid their opportunity costs.
there will be no change in the number of firms if the industry is perfectly competitive.
the factors of production are being paid less than their opportunity costs.
the factors of production are being paid more than their opportunity costs.
the firm will exit the industry.
9. All but which one of the following are true of monopolistic competition?
MR = MC
P>MC
AR = MR
The demand curve the firm faces slopes downward.
Entry is easy.
10. A firm in perfect competition is assumed to be
a price leader.
a developer of new inventions.
small in size, relative to the size of the industry.
large in size, relative to the size of the industry.