Learning Module 1 The Firm and Market Structures

A perfectly competitive firm maximizes profit by producing the quantity at which:

A firm breaks even when:

If a firm is operating where price is below minimum average variable cost, the correct short-run action is:

Which statement correctly describes economies of scale?

In monopolistic competition in the long run, a typical firm will:

Which measure is computed as the sum of squared market shares of firms in an industry?

In the Cournot duopoly model with aggregate demand P = 450 - Q and constant marginal cost MC = 30 for each firm, the Cournot equilibrium quantity per firm is:

When firms in an oligopoly match rivals' price decreases but do not match price increases, demand becomes:

Which of the following increases the Herfindahl-Hirschman Index (HHI) most, holding all else equal?

A firm in imperfect competition faces a downward-sloping demand curve. If it reduces price to sell more units, marginal revenue is:

If a firm’s short-run marginal cost (SMC) equals marginal revenue at an output where SMC is falling, this candidate output is:

Which of the following most accurately describes the minimum efficient scale?

A monopolist chooses output where MR = MC and sets price using the demand curve. Compared to perfect competition, a monopolist will typically:

Which factor does NOT determine market structure according to the chapter?

Which of the following is true about a firm operating in perfect competition in the long run?

Which of the following best explains why advertisers and branding matter in monopolistic competition?

If a market has ten firms each with 10 percent share, the four-firm concentration ratio equals:

Using the same market (ten firms with 10 percent each), the HHI for the top four firms equals:

In an oligopoly, the Cournot equilibrium lies between monopoly and perfect competition because:

Which condition is most likely to make successful collusion in an oligopoly more sustainable?

Which of the following best describes the shutdown decision in the short run?

A firm’s long-run average total cost curve is derived as:

Which outcome describes a dominant firm in an oligopoly?

Which market structure best fits a product market with many sellers, each selling slightly differentiated goods and engaging in substantial advertising?

Which of the following is a weakness of using the concentration ratio to assess market power?

If a firm’s total revenue equals 360,000 and total cost equals 360,000 at output Q = 40, the firm is:

In the Cournot duopoly example with QD = 450 - P and MC = 30, industry price at Cournot equilibrium is:

Which of the following is true about a firm’s supply curve in monopolistic competition?

Which of the following best characterizes the long-run equilibrium outcome in monopolistic competition compared to perfect competition?

Which practice would most likely be used to identify whether an industry behaves like an oligopoly in practice?

If a firm is operating in the short run at a loss but price exceeds average variable cost, the firm should:

A firm experiencing diseconomies of scale should ideally:

Which of the following is a reason why the HHI may be preferred by regulators over the simple concentration ratio?

If a firm in an oligopoly believes rivals will not change output in response to its increase, it is using which assumption?

In the shutdown example, a firm had revenue of GBP2 million, TC of GBP2.5 million, TFC of GBP1 million, TVC of GBP1.5 million. Short-run advice is:

A cartel is best described as:

Which of the following would reduce the likelihood that firms in an oligopoly will successfully collude?

Which of the following distinguishes monopolistic competition from perfect competition?

Which of the following is an econometric challenge when estimating demand elasticity for market power analysis?

Which of the following would most likely indicate increasing returns to scale?

A firm’s accounting profit differs from economic profit because economic profit:

If a monopoly faces linear demand and decreasing price raises total revenue initially but later reduces it, what does MR do as output increases?

Which of the following is true about barriers to entry?

Which of the following is a correct statement about a firm’s marginal revenue curve under imperfect competition?

Which of the following approaches is considered ideal but often impractical for measuring market power?

Which pricing outcome is most likely in an oligopoly under the Nash equilibrium concept?

Which of the following is an example of a barrier to entry?

If a firm in monopolistic competition is earning positive economic profit this year, what is likely in the long run?

Which of the following best explains why price wars may occur in oligopoly markets?

Which of the following is NOT a reason why long-run firms under perfect competition earn no economic profits?