15Q MCQ assignment

What happens to profit, consumer surplus, and deadweight loss in a price-discriminating monopoly?

• Profit decreases, consumer surplus decreases, and deadweight loss increases.

• Profit increases, consumer surplus increases, and deadweight loss decreases.

• Profit increases, consumer surplus decreases, and deadweight loss decreases.

• Profit decreases, consumer surplus increases, and deadweight loss increases.

What is non-price competition?

• Setting prices below marginal cost to increase market share.

• Competing through product differentiation, branding, and packaging rather than price.

• Selling identical goods at different prices to different consumers.

• Cooperating with competitors to maintain high prices.

What does the total revenue test measure?

• Changes in fixed costs as output increases.

• Whether demand is elastic or inelastic based on price changes and revenue.

• The difference between accounting profit and economic profit.

• The profit-maximizing quantity of a monopoly.

What are the characteristics of monopolistic competition?

• A single seller with high barriers to entry.

• Few large firms dominating the market.

• Many sellers with differentiated products.

• Homogeneous products and price-taking behavior.

What are the advantages of monopolistic competition?

• Significant control over prices due to few competitors.

• High barriers to entry and lower costs.

• Product differentiation and meeting diverse consumer needs.

• Higher profits in the long run due to market control.

What eventually happens to short-run profits in monopolistic competition?

• They increase as new firms enter the market.

• They remain constant due to price-setting power.

• They decrease as new firms enter, driving demand down.

• They are unaffected by changes in market conditions.

What does the government do to regulate monopolies?

• Enforce collusion between competitors.

• Impose price ceilings to prevent overcharging.

• Increase barriers to entry to reduce competition.

• Decrease output to align with consumer surplus.

What is the socially optimal quantity of output in a monopoly?

• The output where total revenue equals fixed costs.

• The output where marginal cost equals marginal revenue.

• The output where marginal cost equals demand.

• The output where price exceeds average total cost.

What is game theory?

• The study of consumer preferences in competitive markets.

• The study of how firms behave in strategic situations.

• The practice of collusion to maximize profits.

• The analysis of elastic demand in monopolistic markets.

What is the result of collusion between firms in an oligopoly?

• Firms maximize competition to increase output.

• Firms cooperate to act like a monopoly, restricting output and raising prices.

• Firms lower prices to eliminate market barriers.

• Firms achieve productive and allocative efficiency.