Question : 16.6   Chapter Figures The figure above shows a firm’s demand and : 1238815

 

16.6   Chapter Figures

 

The figure above shows a firm’s demand and average total cost curves.

 

1) The situation in the figure above creates a barrier to entry for a second firm because

i.a second firm that produced as many kilowatt-hours as the first firm would see the market price fall beneath its cost and would incur an economic loss.

ii.a second firm that produced fewer kilowatt-hours than the first firm would have to charge a higher price and would not gain many customers.

iii.the first firm’s average total cost curve indicates it has been given a patent for the product.

A) i only

B) ii only

C) iii only

D) i and ii

E) i and iii

The figure above shows a monopoly’s total revenue and total cost curves.

 

2) Using the figure above, which of the following statements is (are) correct?

i.MR = MC when 3 haircuts are produced.

ii.If the firm charges each customer the same price for a haircut, the price of a haircut is $42.

iii.The firm’s MC equals $30.

A) i only

B) ii only

C) i and ii

D) i and iii

E) None of the above is correct.

3) Using the figure above, which of the following statements are correct?

i.MR = MC = $42 when 3 haircuts are produced.

ii.If the firm charges each customer the same price for a haircut, the price of a haircut is $14.

iii.The firm’s economic profit is $12.

A) i only

B) ii only

C) i and ii

D) i and iii

E) i, ii, and iii

 

4) Using the figure above, which of the following statements are correct?

i.When 3 haircuts are produced, the firm’s ATC is $10.

ii.If the firm charges each customer the same price for a haircut, the price of a haircut is $14.

iii.The firm is NOT a perfect competitor.

A) i only

B) ii only

C) i and ii

D) i and iii

E) i, ii, and iii

The above figure shows a market.

 

5) If the market was a monopoly, the quantity would be ________ and the price would be ________; if the market tis perfectly competitive, the quantity would be ________ and the price would be ________.

A) Q1; P1; Q2; P2

B) Q2; P1; Q1; P2

C) Q1; P1; Q2; P1

D) Q1; P2; Q2; P1

E) Q1; P2; Q1; P1

 

6) The figure above shows that monopoly is ________ because it produces a level of output at which ________.

A) inefficient; marginal benefit equals marginal cost

B) efficient; marginal benefit equals marginal cost

C) efficient; marginal benefit exceeds marginal cost

D) inefficient; marginal benefit exceeds marginal cost

E) efficient; producer surplus is maximized

7) If the market in the figure above is a profit-maximizing single-price monopoly, consumer surplus is the area ________.

A) ABH

B) BFGH

C) ACG

D) BCD

E) ACE

 

8) If the market in the figure above is perfectly competitive, consumer surplus is the area ________.

A) ABH

B) BFGH

C) ACG

D) BCD

E) ACE

 

9) If the market in the figure above is a profit-maximizing single-price monopoly, the deadweight loss is the area ________.

A) ABH

B) BFGH

C) ACG

D) BCD

E) ACE

10) If the market in the figure above is a profit-maximizing single-price monopoly, the producer surplus is the area ________.

A) ABH

B) BFGH

C) ACG

D) BDEH

E) ACE