Unit 4 Review - AP Microeconomics

Front

Based on the graph above, what would be the socially optimal quantity and price?

Back

Price T and Q 3

Front

The airline industry is most likely in the market structure called

Back

oligopoly

Front

What is the Nash Equilibrium?

Back

Brewer’s should choose to concentrate on fries, and Royal’s should choose to concentrate on burgers.

Front

The airline industry is most likely in the market structure called

Back

oligopoly

Front

Short run marginal costs eventually increase because of the effects of: increasing marginal product, diminishing marginal product, increasing fixed costs, diseconomies of scale

Back

diminishing marginal product

Front

A Monopoly
Options:
Total cost is greater than marginal cost
will charge a lower price because of lower barriers
will charge a higher price because of higher barriers

Back

will charge a higher price because of higher barriers

Front

Perfectly competitive firms earn only short run profits or losses because: There are low barriers causing more competition in the long run.

Back

There are low barriers causing more competition in the long run.

Front

What is each firm's dominant strategy? Options: Firm 1 goes high firm 2 goes high, Firm 1 does not, firm 2 does not, Firm 1 does not, firm 2 low, None of the above

Back

Firm 1 does not, firm 2 low

Front

Regardless of market structure, profit maximizing firms will produce

Back

Where MR=MC

Front

Why does a monopoly earn profit in the short and long run?

Back

High barriers and a unique product allows for less competition.