Microeconomics Competition Review

A market structure in which only one producer supplies a good that is in demand, thereby permitting them to set the price by how much they supply, is called

• competition.

• monopoly.

• oligopoly.

• conglomerate.

In this supply & demand schedule, what would happen if the price of the socks was set at $2.50 a pair?

• All socks would sell because it would be the equilibrium price.

• a shortage.

• a surplus.

• No socks would be produced because it would be the equilibrium price.

In a perfect market economy, for what price will the socks be sold?

• $1.50

• $2.00

• $3.00

• $4.50

Product differentiation is MOST important in which market structure?

• monopoly

• corporation

• monopolistic competition

• pure competition

A market structure in which a large number of firms all produce the same product and no single seller controls supply or prices.

• Monopoly

• Monopolistic Comeptition

• Oligopoly

• Perfect Competition

What is the Profit Maximizing Formula?

• Revenue > Expenses

• MR > ATC

• MR = MC

• AFC + AVC = ATC

What is the difference between Accounting (Normal) Profit and Economic Profit?

• Merchandise Costs

• Opportunity Cost

• Labor Cost

• Expenses

According to the Profit Maximizing Formula, how many units should this firm produce?

• 2

• 3

• 4

• 5

Which of the following is the best definition for Marginal Cost?

• The cost of producing more units

• The cost of producing one additional unit

• Fixed costs

• Variable Costs

How does an increase in Fixed Costs affect a firm's output in the short run?

• Output Increases

• Output Decreases

• Output is unaffected in the short run