Owsley - Unit 4 Graphs

In the long run a firm or firms will...

• exit the market because of economic loss

• exit the market because of economic profit

• enter the market because of economic loss

• enter the market because of economic profit

• There will be no entry or exit by firms

The average total cost this monopolistically competitive firm at its profit maximizing quantity is

• P5

• P4

• P3

• P2

• P1

The profit of this monopolistically competitive firm is

• $120

• $300

• $480

• $210

• $190

Which box represents the profit-maximizing point for a perfectly

competitive firm?

• A

• B

• C

• D

• E

If this firm were a profit-maximizing monopolist, the price and output would be which of the following?

• Q1, f

• Q1, c

• Q1, Q2

• Q2, h

• Q2, e

Deadweight loss is equal to which of the following areas?

• a,b,c

• c,d,f,g

• 0,a,b,Q1

• g,h,b

• Q1,Q2,g,h

The figure attached shows a perfectly competitive market. If the market price is $10, the firm will

• earn an economic profit

• earn an economic loss

• earn normal profit

• be forced to shut down in the longterm

• will immediately shutdown

Consumer surplus in the monopolist market is equal to the area

• a,b,c,e

• a,b,c,f

• P5,c,d

• 0,Q1,a,P1

• P1,P5,c,a

Which of the following is a characteristic of a monopoly market?

• Firms produce a homogeneous product.

• Barriers to entry exist.

• Firms are price-taking profit maximizers.

• Deadweight loss is eliminated through entry of competing firms in the long run.

• In the long run the firm earns normal profits.

The producer surplus of this monopolistically competitive firm is equal to the areas of

• 9,8

• 9,8,5,4

• 7,6,3,2

• 7,6,3,5,4

• 7