A) spending the same amount as they did in previous years.
B) spending the historical average of 1/4 of total production cost.
C) determining what it will take to eliminate excess capacity.
D) balancing the cost and the benefit of product development and marketing.
E) ensuring that the marginal cost of product development and marketing is less than or equal to the marginal cost of producing the good or service.
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A) efficiency.
B) elasticity.
C) quality, price, and marketing.
D) the level of output and the price.
E) demand.
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A) scrutinizes any merger of firms in a market in which the four-firm concentration exceeds 25 percent.
B) uses only the Herfindahl-Hirschman Index when considering whether to challenge a merger.
C) is likely to challenge a merger if the Herfindahl-Hirschman Index exceeds 1800.
D) Answers A and B are correct.
E) Answers B and C are correct.
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A) shifts existing firms' demand curves rightward.
B) shifts existing firms' demand curves leftward.
C) only results in a movement along the existing firms' demand curves.
D) has no effect on the existing firms' demand curves.
E) shifts existing firms' supply curves rightward.
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A) i and ii
B) ii only
C) ii and iii
D) i and iii
E) i, ii, and iii
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A) people perceive the firm's product to be better than those of its competitors.
B) the marginal cost of product development is equal to the marginal revenue from product development.
C) the price of the good is higher than its marginal cost.
D) the advertising costs are covered.
E) the firm's total revenue exceeds its total costs.
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A) increases all firms' demand.
B) decreases all firms' demand.
C) lowers all firms' costs.
D) might increase or decrease the firms' prices.
E) lowers all firms' prices.
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In monopolistic competition,there are a ...View Answer
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The Herfin...View Answer
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A) your local water company.
B) the sole cable television company.
C) the many Chinese restaurants in San Francisco .
D) Kansas Power and Light, the sole provider of electricity in Kansas City.
E) Shaniq, a wheat farmer.
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A) its marginal revenue is less than $3.56.
B) its marginal revenue is equal to $3.56.
C) its marginal revenue is more than $3.56.
D) its average total cost is equal to $3.56.
E) Both answers B and D are correct.
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A) many perfect substitutes.
B) no close substitutes.
C) no substitutes of any kind.
D) close but not perfect substitutes.
E) many different complements.
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A) they shut down.
B) they exit the industry.
C) the market turns into a monopoly.
D) new firms enter the industry.
E) the firms in the market increase their production so that their economic profit disappears.
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A) face a downward-sloping demand curve.
B) cannot charge a markup because there are no dominant firms.
C) definitely do not benefit from advertising.
D) produce at the efficient scale in the long run.
E) generally have low to nonexistent selling costs.
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A) increases.
B) does not change.
C) decreases.
D) might increase or decrease depending on whether the new firms produce exactly the same product or a product that is slightly differentiated.
E) None of the above answers is correct.
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A) each firm can set the price of its particular product.
B) each firm must charge the same price.
C) the price is established by collusive behavior.
D) each firm must produce the same quantity.
E) firms cannot compete with each other on the basis of price.
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A) makes positive economic profit in the long run.
B) is producing at an output where marginal cost equals price.
C) is not maximizing its profits.
D) produces a product identical to that of its competitors.
E) produces at an output level where average total cost is not at its minimum.
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A) enter the market when economic losses are being incurred.
B) exit the market when economic profits are being made.
C) enter the market when firms are making zero economic profit.
D) can enter a market to compete for economic profits and leave when economic losses are being incurred.
E) find it easy to permanently make an economic profit.
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A) P = MC
B) P = MR
C) ATC = MC
D) P = ATC
E) MC = ATC
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A) perfect competition or monopolistic competition.
B) perfect competition or monopoly.
C) monopolistic competition or oligopoly.
D) monopolistic competition or monopoly.
E) oligopoly or monopoly.
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