(Test Bank)Economics for Managers, 3rd Edition by Paul G. Farnham chapter 8

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1、EconomicsforManagers,3e(Farnham)Chapter8MarketStructure:MonopolyandMonopolisticCompetition1)Allofthefollowingarestrategiesafirmwithmarketpowercanadopttoincreaseitprofitsovertimeexcept:A)mergerswith,andacquisitionsof,competingfirms.B)erectingbarrierstoentry.C)settingpriceequaltothemarginalcostsofpr

2、oduction.D)influencingtheregulatoryprocess.Answer:CDiff:1Topic:Strategiestomaximizeprofits2)Allofthefollowingarepossiblecharacteristicsofamonopolyexcept:A)thereisasinglefirm.B)thefirmisapricetaker.C)thefirmproducesauniqueproduct.D)theexistenceofsomeadvertising.Answer:BDiff:1Topic:Characteristicsof

3、monopoly3)Initsefforttomaximizeeconomicprofit,afirmcharacterizedasapricesettermustdetermine:A)onlythepriceitshouldcharge.B)onlythequantityitshouldproduce.C)boththepriceitshouldchargeandthequantityitshouldproduce.D)neitherthepriceitshouldchargeandthequantityitshouldproduceasthesearebothdeterminedby

4、forcesbeyondthefirm'scontrol.Answer:CDiff:1Topic:Characteristicsofpricesetters4)Whichofthefollowingstatementsregardingamonopolistisfalse?A)Themarginalrevenuecurveliesbelowthedemandcurveforthemonopolist'soutput.B)Unlikeaperfectlycompetitivefirm,amonopolistfaceslittleornocompetition.C)Themonopolists

5、etspriceequaltomarginalcosttomaximizeprofits.D)Themonopolistmayormaynotearnpositiveeconomicprofits.Answer:CDiff:2Topic:Characteristicsofmonopoly26Copyright©2014PearsonEducation,Inc.5)Assumethatwhenpriceis$20,quantitydemandedis9units,andwhenpriceis$19,quantitydemandedis10units.Basedonthisinformatio

6、n,whatisthemarginalrevenueresultingfromanincreaseinoutputfrom9unitsto10units?A)$20B)$19C)$10D)$1Answer:CDiff:2Topic:Calculatingmarginalrevenue6)Assumethatwhenpriceis$20,quantitydemandedis9units,andwhenpriceis$19,quantitydemandedis10units.Basedonthisinformation,wecanconcludethatoverthepricerangefro

7、m$19to$20,demandisprice:A)elastic.B)unitelastic.C)inelastic.D)cannotbedetermined.Answer:ADiff:2Topic:Revenuesandpriceelasticity7)SupposeamonopolistisproducingalevelofoutputsuchthatMR>MC.Whatshouldthefirmdotomaxim