unit 3 test

profit maximization occurs when

• MR=MC

• TR>TC

• MC=AC

• P=AC

a market becomes more competitive as there are ___ buyers and ___ sellers

• fewer; fewer

• fewer; more

• more; fewer

• more; more

selling the same product at different prices to different people

a monopoly is a firm:

• that is exempt from patent protection

• that sets price above marginal cost without concern that other firms will enter the industry

• without market power

• that sets price higher than or equal to marginal cost

to maximize profit, the monopolist increases output

monopolist price is ____ than competitve firms

• higher

• lower

the elimination principle states that ___ normal profits are eliminated by ___, and ___ normal profits are eliminated by ___.

• above-; prices; below-; costs

  
  

• below-; prices; above-; costs

  
  

• below-; entry; above-; exit

  
  

• above-; entry; below-; exit

  
  

in a competitive market

in a competitive industry

• all firms produce at the same marginal cost

• some firms have higher marginal cost than others

• some firms face different prices than others

• all firms have the same marginal cost curve

fixed cost