ECP3704 FINAL Exam Questions with Complete Solutions 100% Verified| Latest
Update Graded A+
all else held constant, as additional firms enter an industry more output is available at each
given price
An income elasticity less than zero tells us that the good is: An inferior good
If the cross-price elasticity between good A& B is negative, we know the goods are
complements
Lemonade, a good with many close substitutes, should have an own-price elasticity that is
relatively elastic
If the absolute value of the own-price elasticity of steak is 0.4, a decrease in price will lead to
A reduction in total revenue
Economies of scale exist whenever long-run average costs decrease as output is increased
An isocost line Represents the combinations of K and L that cost the firm the same amount
of money
with a straight line isoquant, there is perfect substitutable relationship between all inputs
When the marginal cost curve is below an average cost curve, average cost is Declining with
output
, An L-shaped isoquant implies inputs are used in fixed proportions
when output rises, AFC must fall
Isoquants are normally drawn with a convex shape because inputs are not perfectly
substitutable
What is true for a monopoly in equilibrium? P>MC
If a monopolistically competitive firm's MC increases, then in order to maximize profits the firm
will reduce output and increase price
In the short-run, a monopolist will shut down if P<AVC
iN THE LONG-RUN, MONOPOLISTICALLY COMPETITIVE FIRMS CHARGE PRICES ABOVE THE
MINIMUM OF AVERAGE TOTAL COST
Differentiated goods are not a feature of a perfectly competitive and monopolistic markets
What is in common with monopolistic and monopolistically competitive markets? Many
buyers
What is the representation of a the profit maximizing monopoly? MC=MR
What is the primary difference between monopolistic competition and perfect competition?
product differentiation
Update Graded A+
all else held constant, as additional firms enter an industry more output is available at each
given price
An income elasticity less than zero tells us that the good is: An inferior good
If the cross-price elasticity between good A& B is negative, we know the goods are
complements
Lemonade, a good with many close substitutes, should have an own-price elasticity that is
relatively elastic
If the absolute value of the own-price elasticity of steak is 0.4, a decrease in price will lead to
A reduction in total revenue
Economies of scale exist whenever long-run average costs decrease as output is increased
An isocost line Represents the combinations of K and L that cost the firm the same amount
of money
with a straight line isoquant, there is perfect substitutable relationship between all inputs
When the marginal cost curve is below an average cost curve, average cost is Declining with
output
, An L-shaped isoquant implies inputs are used in fixed proportions
when output rises, AFC must fall
Isoquants are normally drawn with a convex shape because inputs are not perfectly
substitutable
What is true for a monopoly in equilibrium? P>MC
If a monopolistically competitive firm's MC increases, then in order to maximize profits the firm
will reduce output and increase price
In the short-run, a monopolist will shut down if P<AVC
iN THE LONG-RUN, MONOPOLISTICALLY COMPETITIVE FIRMS CHARGE PRICES ABOVE THE
MINIMUM OF AVERAGE TOTAL COST
Differentiated goods are not a feature of a perfectly competitive and monopolistic markets
What is in common with monopolistic and monopolistically competitive markets? Many
buyers
What is the representation of a the profit maximizing monopoly? MC=MR
What is the primary difference between monopolistic competition and perfect competition?
product differentiation
