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Question;13.The;following table provides information on the price, quantity, and average cost;for a;monopoly. At what price will the firm maximize its profit?;Price Output ATC;$5 0??;$4 4 $1.00;$3 8 $0.75;$2 12 $0.75;$1 16 $0.81;$0 20 $0.90;a.$1;b.$2;c.$3;d.$4;14George and;Jerry are competitors in a local market. Each is trying to decide if it is;better to advertise on TV, on radio, or not at all. If they both advertise on;TV, each will earn a profit of $3,000. If they both advertise on radio, each;will earn a profit of $5,000. If neither advertises at all, each will earn a;profit of $10,000. If one advertises on TV and the other advertises on radio, then;the one advertising on TV will earn $4,000 and the other will earn $2,000. If;one advertises on TV and the other does not advertise, then the one advertising;on TV will earn $8,000 and the other will earn $5,000. If one advertises on;radio and the other does not advertise, then the one advertising on radio will;earn $9,000 and the other will earn $6,000. If both follow their dominant;strategy, then George will;a.advertise;on TV and earn $3,000.;b.advertise;on radio and earn $5,000.;c.advertise;on TV and earn $8,000.;d.not;advertise and earn $10,000.;Table 1.The information in the table below shows;the total demand for premium?channel;digital cable TV subscriptions in a small urban market. Assume that;each digital cable TV;operator pays a fixed cost of $200,000 (per year) to provide premium;digital channels in the;market area and that the marginal cost of providing the premium;channel service to a;household is zero.;Quantity Price (per year);0 $180;3,000 $150;6,000 $120;9,000 $ 90;12,000 $ 60;15,000 $ 30;18,000 $ 0;15.Refer;to Table 1. Assume there are;two profit?maximizing digital cable TV companies operating in this market.;Further assume that they are not able to collude on the price and quantity of premium;digital channel subscriptions to sell. What price will premium digital channel;cable TV subscriptions be sold at when this market reaches a Nash equilibrium?;a.$30;b.$60;c.$90;d.$120;16.Refer;to Table 1. Assume there are;two profit?maximizing digital cable TV companies;operating in this market. Further assume that they are not able to collude;on the price and;quantity of premium digital channel subscriptions to sell. How many;premium digital channel cable TV subscriptions will be sold altogether when;this market reaches a Nash equilibrium?;a.6,000;b.9,000;c.12,000;d.15,000;17.Refer to Table 1. Assume that there are two profit?maximizing digital cable TV;companies operating in this market. Further assume that they are not able to;collude on the price and quantity of premium digital channel subscriptions to;sell. How much profit will each firm earn when this market reaches a Nash;equilibrium?;a.$25,000;b.$90,000;c.$160,000;d.$215,000;18.A;monopolist;a.has a;supply curve that is upward?sloping, just like a competitive firm.;b.does not;have a supply curve because the monopolist sets its price at the same;time it chooses the quantity to supply.;c.has a;horizontal supply curve, just like a competitive firm.;d.does not;have a supply curve because marginal revenue exceeds the price it;charges for its products.;19.One advantage;of allowing a market for pollution permits to control the total amount of;pollution released in an area is that;a.the;government knows exactly how much each firm is allowed to pollute.;b.government;revenue from the sale of permits is greater than revenue from a;Pigovian tax.;c.the initial;allocation of permits to firms does not affect the efficiency of the;market.;d.firms will;work together to eventually eliminate pollution.;20.Suppose;when a monopolist produces 75 units its average revenue is $10 per unit, its;marginal revenue is $5 per unit, its marginal cost is $6 per unit, and its;average total cost is $5 per unit. What can we conclude about this monopolist?;a.The;monopolist is currently maximizing profits, and its total profits are $375.;b.The;monopolist is currently maximizing profits, and its total profits are $300.;c.The;monopolist is not currently maximizing profits, it should produce more units;and charge a lower price to maximize profits.;d.The;monopolist is not currently maximizing profits, it should produce fewer units;and charge a higher price to maximize profits.;21.In a;competitive market with identical firms;a.an increase;in demand in the short run will result in a new price above the;minimum of average total cost, allowing firms to earn a positive;economic profit;in both the short run and the long run.;b.firms;cannot earn positive economic profit in either the short run or long run.;c.firms can;earn positive economic profit in the long run if the long?run market;supply curve is upward sloping.;d.free entry;and exit into the market requires that firms earn zero economic profit;in the long run even though they may be able to earn positive economic;profit in;the short run.;22.The supply;curve of a perfect competitor in the short run is;a.Marginal;revenue curve.;b.Marginal;cost curve.;c.Average;revenue curve;d.Marginal;cost curve above its average variable cost curve;23.A;monopolistically competitive firm faces a demand curve, P=20?Q, and earns zero;profit. The firm produces at a constant marginal cost of 2. What is the fixed;cost for this firm?;a.18;b.64;c.81;d.Cannot be;determined from the information given.;24.At 47 units;of labor, a firm finds that average product of labor equals 39.6 and marginal;product of labor equals 32.9. We can conclude that the average product curve at;47 units of labor is;a.upward?sloping.;b.horizontal.;c.vertical.;d.downward?sloping.

 

Paper#57946 | Written in 18-Jul-2015

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