Final Review R2

1. If a firm is a price taker, then the demand curve for the firm's product is:

• A. Equal to the total revenue curve

• B. Perfectly inelastic

• C. Perfectly elastic

• D. Unit elastic

2. Which is true in both monopolies and pure competition?

• A. Profits are positive

• B. Price = Marginal Revenue

• C. Marginal Cost = minimum ATC

• D. Marginal Revenue = Marginal Cost

3. A feature of oligopolies is that there is:

• A. There are many firms in the industry

• B. Mutual interdependency

• C. Always a cartel present

• D. only standardized products

4. In the long run, the economic profits for a monopolistically competitive firm will be:

• A. The same as the profits for a monopolist

• B. Slightly less than the profits of a monopolist

• C. The same as the profits for a purely competitive firm

• D.Slightly more than the profits of a purely competitive firm

5. What is the profit maximizing quantity?

• A. 0

• B. 3

• C. 4

• D. 5

6. How much profit will this firm earn?

• A. 16

• B. 56

• C. 20

• D. 9