Title: final micro econ exam Flashcards | Quizlet
Headings: final micro econ exam
final micro econ exam
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Terms in this set (109)

Content: true
A competitive firm will produce in the short run so long as its price exceeds its average fixed cost
false
Price and marginal revenue are identical for an individual purely competitive seller
true
Because the equilibrium position of a purely competitive seller entails an equality of price and marginal costs, competition produces up to an efficient allocation of economic resources
true
The total revenue curve of competitive seller graphs as a straight, up-sloping line. true
Marginal revenue is the addition to total revenue resulting from the sale of one more unit of output. true
In the long run a pure monopolist must produce at that output where average total cost is at a minimum
false
In the short run a pure monopolist will charge the highest price the market will bear for its product. false
Pure monopolists always earn economic profits
false
If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit, the marginal revenue of the fifth unit is $5
true
Because of the ability to influence price, a pure monopolist can increase price and increase volume of sales simultaneously
false
In the long run monopolistically competitive firms make normal profits because they are forced to operate at the minimum point on their average total cost curve. false
The monopolistically competitive seller maximizes profits by equating price and marginal cost
false
The demand curve of a monopolistically competitive producer is less elastic than that of a purely competitive producer. true
The economic profits earned by monopolistically competitive sellers are zero in the long run. false
If three or four homogeneous oligopolists collude, the resulting price and production outcomes will be similar to those of pure monopoly. true
Generally speaking, the larger the number of firms in an ologpolistic industry, the more difficult it is for those firms to collude. true
In a purely competitive industry competition centers more on advertising and sales promotion than price
false
Although individual purely competitive firms can influence the price of their product, these firms as a group cannot influence market price. false
The demand curve for a purely competitive industry is perfectly elastic, but the demand curves faced by individual firms in such an industry are downsloping.