ECN 221 EXAM 2 WITH QUESTIONS AND CORRECT ANSWERS |
100% VERIFIED | NEWEST UPDATE 2026/2027 | ASSURED PASS
A+
The market structure with many firms selling a differentiated product is ________. -
ANSWER Monopolistic competition
Coffee shops, clothing stores, and landscapers would be good examples of which type of
market structure? - ANSWER Monopolistic competition
The demand curve for an individual firm's product in a perfectly competitive industry __. -
ANSWER is horizontal
Which of the following should not be considered, as the spending has already been done
and cannot be altered? - ANSWER Sunk costs
"Economies of Scale" is defined as ___________. - ANSWER lower cost per unit of
production as production becomes greater
I'MaPizzaCo. manufactures and sells gourmet pizzas. Last year, it made 8,000 mushroom,
sausage and spinach pizzas and sold each one for $18. To make these 8,000 specialty
pizzas, the business had variable costs of $24,000 and a total cost of $40,000.
I'MaPizzaCo's average fixed cost to make 8,000 specialty pizzas was _____. - ANSWER TC
= FC + VC.
, Thus,
$40,000 = $16,000 + $24,000, from the information provided.
AFC= FC / Q
Thus,
AFC = $16,000/8,000 = $2.
A "meet the competition" promise_____ - ANSWER may lead to higher prices
industrywide
We study perfect competition mostly because ________ - ANSWER it serves as a good
base for comparison (ie a reference point when examining other types)
The agricultural sector _____________. - ANSWER provides an example of economies of
scale
Profit is maximized _________________. - ANSWER at a lower quantity than the quantity
where revenue is maximized
The market structure in which all firms are identical is __________. - ANSWER Perfectly
competitive
A monopolist can maximize their profits by ___________. - ANSWER producing output
where MR = MC and charging a price along the demand curve
100% VERIFIED | NEWEST UPDATE 2026/2027 | ASSURED PASS
A+
The market structure with many firms selling a differentiated product is ________. -
ANSWER Monopolistic competition
Coffee shops, clothing stores, and landscapers would be good examples of which type of
market structure? - ANSWER Monopolistic competition
The demand curve for an individual firm's product in a perfectly competitive industry __. -
ANSWER is horizontal
Which of the following should not be considered, as the spending has already been done
and cannot be altered? - ANSWER Sunk costs
"Economies of Scale" is defined as ___________. - ANSWER lower cost per unit of
production as production becomes greater
I'MaPizzaCo. manufactures and sells gourmet pizzas. Last year, it made 8,000 mushroom,
sausage and spinach pizzas and sold each one for $18. To make these 8,000 specialty
pizzas, the business had variable costs of $24,000 and a total cost of $40,000.
I'MaPizzaCo's average fixed cost to make 8,000 specialty pizzas was _____. - ANSWER TC
= FC + VC.
, Thus,
$40,000 = $16,000 + $24,000, from the information provided.
AFC= FC / Q
Thus,
AFC = $16,000/8,000 = $2.
A "meet the competition" promise_____ - ANSWER may lead to higher prices
industrywide
We study perfect competition mostly because ________ - ANSWER it serves as a good
base for comparison (ie a reference point when examining other types)
The agricultural sector _____________. - ANSWER provides an example of economies of
scale
Profit is maximized _________________. - ANSWER at a lower quantity than the quantity
where revenue is maximized
The market structure in which all firms are identical is __________. - ANSWER Perfectly
competitive
A monopolist can maximize their profits by ___________. - ANSWER producing output
where MR = MC and charging a price along the demand curve
