Exhibit 10-3 A monopolistic competitive firm in the long run
As presented in Exhibit 10-3, the long-run profit-maximizing output for the monopolistic competitive firm is:
A. zero units per week.
B. 200 units per week.
C. 400 units per week.
D. 600 units per week.
Answer: C
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For a given quantity, the total profit of a perfectly competitive firm is equal to the vertical distance between the firm's total revenue curve and its total cost curve
Indicate whether the statement is true or false
Suppose that the marginal cost of an additional ton of steel produced by a Japanese firm is the same whether the steel is set aside for domestic use or exported abroad
If the price elasticity of demand for steel is greater abroad than it is in Japan, which of the following will be correct? A) The Japanese firm will sell more steel abroad than they will sell in Japan. B) The Japanese firm will sell more steel in Japan than they will sell abroad. C) The Japanese firm will sell steel at a lower price abroad than they will charge domestic users. D) The Japanese firm will sell steel at a higher price abroad than they will charge domestic users. E) Insufficient information exists to determine whether the price or quantity will be higher or lower abroad.
Retailers do not find it profitable to engage in promotional activities because
a. They reap the full benefits of the promotion b. They do not have to share the benefits of the promotion with the manufacturer c. They are wary of competing retailers' ability to "free ride" on their efforts d. All of the above
Under what conditions can a monopolist have potentially lower costs and possibly charge a lower price than would exist if the market were competitive?
a. when the monopolist operates on the inelastic portion of the demand curve b. when the monopolist is a profit maximizer rather than a revenue maximizer c. when substantial diseconomies of scale are present d. when substantial economies of scale are present