1.
value:
4.00 points
You are the manager of a monopoly that faces a demand curve described by P = 85 − 5Q. Your
costs are C = 20 + 5Q. The revenue-maximizing output is:
None of the answers is correct.
9.
.85.
10
2.
value:
4.00 points
Which of the following is a strategy(ies) used by firms in monopolistically competitive industries
to convince consumers that their product is better than their rivals’ products?
Niche marketing
Comparative advertising
Equity marketing
Comparative advertising or niche marketing
4.
value:
4.00 points
Which of the following market structures would you expect to yield the greatest product variety?
Monopolistic competition
Bertrand oligopoly
Monopoly
Perfect competition
5.
value:
4.00 points
The first-order conditions for a monopoly to maximize profits are:
dR(Q)/dQ = dC(Q)/dQ.
dπ(Q)/dQ = 0.
MR(Q) = MC(Q).
All of the statements associated with this question are correct.
6.
value:
4.00 points
The market demand in a Bertrand duopoly is P = 15 − 4Q, and the marginal costs are $3. Fixed
costs are zero for both firms. Which of the following statement(s) is/are true?
P = $15
P = $3
None of the answers is correct.
P = $10
7.
value:
4.00 points
Which of the following is true?
In oligopoly markets, a change in marginal cost never has an effect on output or price.
In Sweezy oligopoly markets, each firm believes rivals will cut their prices in response to a price
reduction, but will not raise prices in response to price increases.
In Bertrand oligopoly markets, each firm believes that its rivals will hold their output constant if
it changes its output.
In Cournot oligopoly markets, firms produce an identical product at a constant marginal cost and
engage in price competition.
8.
value:
4.00 points
Two firms compete in a Stackelberg fashion. If firm 2 is the leader, then:
Both firm 1 views the output of firm 2 as given and firm 2 views the output of firm 1 as given are
correct.
firm 2 views the output of firm 1 as given.
None of the answers is correct.
firm 1 views the output of firm 2 as given.
9.
value:
4.00 points
A new firm enters a market which is initially serviced by a Bertrand duopoly charging a price of
$30. Assuming that the new firm is equally as efficient as the incumbent firms, what will the new
price be should the three firms coexist after the entry?
Equal to $30
Above $30
Unable to tell given the information provided.
Below $30
10.
value:
4.00 points
Which of the following is true?
Both if there are only two firms in a market, prices must be above marginal cost and if there is
only one firm in a market, prices must be above marginal cost are correct.
