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If its marginal revenue is less than its marginal cost,a firm should reduce its output product.

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Consumers rarely have complete information about products and this lack of information doesn't keep the market from maximizing welfarE.

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The Following Questions Refer to the following graph.For each question,disregard any irrelevant lines. The Following Questions Refer to the following graph.For each question,disregard any irrelevant lines.   -Suppose the market is competitivE.Equilibrium market price and output will be A) P<sub>1</sub>,X<sub>2</sub> B) P<sub>2</sub>,X<sub>3</sub> C) P<sub>3</sub>,X<sub>1</sub> D) P<sub>1</sub>,X<sub>4</sub> E) P<sub>3,</sub> X<sub>2</sub> -Suppose the market is competitivE.Equilibrium market price and output will be


A) P1,X2
B) P2,X3
C) P3,X1
D) P1,X4
E) P3, X2

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The Following Questions Refer to the graph below,showing a monopoly market. The Following Questions Refer to the graph below,showing a monopoly market.   -At the profit maximizing quantity,the firm's total revenue equals A) $10 B) $15 C) $20 D) $1,000 E) $1,400 -At the profit maximizing quantity,the firm's total revenue equals


A) $10
B) $15
C) $20
D) $1,000
E) $1,400

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The Following Questions Refer to the graph below,which is for a firm in a competitive market. The Following Questions Refer to the graph below,which is for a firm in a competitive market.    -The profit-maximizing price and quantity for this competitive firm are A) $5 and 100 B) $5 and 150 C) $7 and 100 D) $7 and 150 E) $7 and more than 150 -The profit-maximizing price and quantity for this competitive firm are


A) $5 and 100
B) $5 and 150
C) $7 and 100
D) $7 and 150
E) $7 and more than 150

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A four-firm concentration ratio of 0.9 indicates that the four largest firms in the industry control 90% of the industry's sales.

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The Following Questions Refer to the graph below. The Following Questions Refer to the graph below.   -Society's net benefits are maximized when price and quantity in the market are A) $16 and 10 B) $12 and 10 C) $12 and 14 D) $8 and 14 E) $8 and 10 -Society's net benefits are maximized when price and quantity in the market are


A) $16 and 10
B) $12 and 10
C) $12 and 14
D) $8 and 14
E) $8 and 10

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Firms may advertise their products in order to


A) Create a barrier to entry
B) Provide consumers with information
C) Increase demand for their product
D) Differentiate their product
E) Do all of the above

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The Following Questions Refer to the graph below. The Following Questions Refer to the graph below.   -At what level of output does the firm experience economies of scale? A) 0 B) 0 - Q<sub>0</sub> C) Q<sub>0</sub> D) Above Q<sub>0</sub> E) This firm does not experience economies of scale -At what level of output does the firm experience economies of scale?


A) 0
B) 0 - Q0
C) Q0
D) Above Q0
E) This firm does not experience economies of scale

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Monopoly can lead to a perverse redistribution of income if the owners of the monopoly are wealthier than buyers.

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A benefit of monopoly is that costs are lower.

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The Following Questions Refer to the graph below. The Following Questions Refer to the graph below.   -It is cheaper per unit to produce higher quantities when output is A) High B) Between 0 and Q<sub>0</sub> C) Q<sub>0</sub> D) Above Q<sub>0</sub> E) Decreasing -It is cheaper per unit to produce higher quantities when output is


A) High
B) Between 0 and Q0
C) Q0
D) Above Q0
E) Decreasing

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The monopoly power of a firm in an imperfectly competitive market is greater the larger the firm's output relative to the industry output.

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In their desire to achieve the quiet life,monopolists tend to allow costs to rise above competitive levels.

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Profit maximization as an objective of a firm is a logical extension of the general principle that people

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The Following Questions Refer to the graph below,which is for a firm in a competitive market. The Following Questions Refer to the graph below,which is for a firm in a competitive market.    -The firm's total revenue is A) $5 B) $7 C) $100 D) $150 E) $500 -The firm's total revenue is


A) $5
B) $7
C) $100
D) $150
E) $500

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Unlike in competition,the monopolist is driven by a desire to maximize profit.

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If a firm sells 100 units of output at a price of $5 and each unit costs $3 to produce,the firm is earning a


A) Profit of $200
B) Loss of $2 per unit
C) Loss of $200
D) Profit of $500
E) Loss of $300

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Changes in the design and quality of a product often results in greater consumer satisfaction from the product.

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The capture theory of regulation suggests


A) In the absence of regulation,consumer welfare is often captured by firms in the market
B) The lost consumer welfare due to unfair business practices can be offset through government regulation
C) When market failure exists,regulation is appropriate
D) The regulators of an industry are often "captured" by the firms in the market
E) None of the above

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