(A) firms will only earn a normal profit.
(B) the efficient output level will be produced in the long run.
(C) firms will be producing at minimum average cost.
(D) firms realise all economies of scale.
Tag: Economics Mcqs With Answers
A firm in a monopolistically competitive industry?
(A) must lower price to sell more output.
(B) sells a fixed amount of output regardless of price.
(C) can sell an infinite amount of output at the market-determined price.
(D) must raise price to sell more output.
A monopolistically competitive firm that is incurring a loss will produce as long as the price that the firm charges is sufficient to cover?
(A) advertising costs.
(B) fixed costs.
(C) marginal costs.
(D) variable costs.
In monopolistic competition, firms achieve some degree of market power?
(A) by producing differentiated products.
(B) because of barriers to entry into the industry.
(C) because of barriers to exit from the industry.
(D) by virtue of size alone.
onopolistic competition differs from perfect competition primarily because?
(A) in perfect competition, firms can differentiate their products.
(B) in monopolistic competition, firms can differentiate their products.
(C) in monopolistic competition, there are relatively few firms.
(D) in perfect competition, there are no barriers to entry.
How can a government regulate a monopoly firm making supernormal profits so that a “socially optimal” outcome obtains:
(A) set the firm’s price (and quantity) corresponding to the point where the MC
curve intersects the AC curve from below.
(B) set the firm’s price (and quantity) corresponding to the point where the MC curve
intersects the MR curve from below.
(C) set the firm’s price (and quantity) corresponding to the point where the MR curve
intersects the AC curve and AC>MR after that point.
(D) set the firm’s price (and quantity) corresponding to the point where the AR curve
intersects the MC curve and MC>AR after that point.
An industry that realises such large economies of scale in producing its product that singlefirm production of that good or service is most efficient is called?
(A) an economies of scale monopoly.
(B) a natural monopoly.
(C) a government franchise monopoly.
(D) a fixed cost monopoly.
Suppose we know that a monopolist is maximising her profits. Which of the following is a correct inference? The monopolist has?
(A) maximised the difference between marginal revenue and marginal cost.
(B) maximised its total revenue.
(C) equated marginal revenue and marginal cost.
(D) set price equal to its average cost.