Unit 6 Review 2

Jaden's Chess Board Co. increases all its inputs by 50 percent each. If Jaden's output increases by 100 percent, then the company is experiencing

• 
  increasing returns to scale

• 
  decreasing profits

• diminishing returns

• diseconomies of scale

• 
  increasing marginal cost

If the three largest gadget producers control 85% of the total gadget market, then these producers are operating in:

• perfect competition

• an oligopoly

• a monopoly

• a natural monopoly

• monopolistic competition

A perfectly competitive firm should produce the quantity at which marginal cost is equal to: (MULTI-SELECT)

• price

• average variable cost

• marginal revenue

• total cost

• demand

A perfectly competitive firm's short-run demand curve is:

• perfectly elastic

• perfectly inelastic

• downward sloping

• upward sloping

• vertical

A monopoly is different from a perfectly competitive firm in that a monopoly

• has an average fixed cost curve that is perfectly horizontal

• does not have a U-shaped average total cost curve

• has a marginal revenue curve that is below its demand curve

• always earns normal profit

• always earns economic profits

Relative to a perfectly competitive industry with the same costs, a monopolist:

(MULTI-SELECT)

• charges a lower price

• charges a higher price

• has less regulation

• produces more output

• produces less output

A difference between oligopolists and monopolistic competitors is that:

• only monopolistic competitors collude

• oligopolists can earn economic profit in the long run

• oligopolists engage in product differentiation

• monopolistic competitors can incur a loss

• oligopolists care about brand name loyalty