Question;? Question;1;2 out of 2 points;Which of the following industries;can create barriers to the entry of new firms due to size and specificity?;Answer;? Question;2;2 out of 2 points;Which of the following activities;undertaken by a competitive firm can improve its public relations?;Answer;? Question;3;2 out of 2 points;Which of the following is a;reason behind Wal-Mart?s success?;? Question;4;2 out of 2 points;If two small perfectly;competitive firms merge, the merged firm will be;Answer;? Question;5;2 out of 2 points;Refer to Figure 8-1. If the firm;purchases a new machinery which produces fewer defective units of output using;the same variable inputs as before, which of the following changes will be;observed? (Assume that consumers suffer losses from defective units that they;cannot otherwise recover.);The figure given below represents a firm in a market;characterized by many buyers and one seller. MC represents the initial marginal;cost, MR the initial marginal revenue, and D the initial demand curve of the;firm in equilibrium. Further, MC', D', and MR' represents the revised marginal;cost, demand, and marginal revenue respectively after the firm adopts the;strategy discussed below.;Figure 8-1;? Question;6;2 out of 2 points;Temporary discounts offered to;customers by competitive retailers usually reflect;Answer;? Question;7;2 out of 2 points;Refer to Figure 8-4. If a;preexisting firm adopts a new cost effective technology (which reduces;production costs). Which of the following changes will be observed?;In the figure given below, Panel A represents preexisting;firms which are in long run equilibrium at price P0 and output q0. MC and AC;represents the marginal cost and the average cost of the preexisting firms.;Panel B represents a market where every seller has the smallest ability to;affect prices. The market is in equilibrium at price P0 and output Q;shown by the intersection of the long-run supply curve (LRS);and market demand (D).;Figure 8-4;? Question;8;2 out of 2 points;Refer to Figure 8-6. Determine;the profit earned by the perfume monopolist if it chooses to hire a retailer;for selling its product.;The figure given below represents a monopoly firm producing;perfume with downward sloping demand and marginal revenue (MR) curves. The;products of this firm are sold in the competitive market by a retailer. Among;the horizontal lines in the figure;A - represents the marginal cost of per unit perfume production;B - represents the marginal cost of an independent perfume;retailer;C - represents the sum of A and B;D - represents the marginal cost of the perfume monopolist;for retailing its own output;E - represents the sum of A and D.;Figure 8-6;? Question;9;2 out of 2 points;Which of the following contracts;contain vertical restrictions that limit the transacting parties? choices but;create economic value?;? Question;10;0 out of 2 points;In a market characterized by many;sellers, if an outsider devises a way to reduce transaction costs it will;Answer;? Question;11;2 out of 2 points;Which of the following;exemplifies an intangible durable strategy used by firms to prevent;competition?;? Question;12;2 out of 2 points;In order to be successful as an;innovator, a firm may require;? Question;13;2 out of 2 points;A firm?s resource at a given;point in time can be defined as;Answer;? Question;14;2 out of 2 points;Refer to Figure 8-3. Suppose the;seller incurs an additional cost of $1 per unit of output to reduce the;transaction costs of the buyers to zero. How will the profit earned by the;seller change?;The figure given below represents a firm in a market;characterized by many buyers and one seller. MC is the initial marginal cost of;the seller. MC' denotes the marginal cost inclusive of the $1 transaction cost.;On the other hand, buyers incur a transaction cost worth $2 represented by the;vertical distance between D and D'. MR and MR' represent the marginal revenue;curve corresponding to the demand curves D and D' respectively.;Figure 8-3;? Question;15;Under which of the following;situations would a seller prefer to incur the cost of improving the product;quality?
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