Chapter Questions
Plot the marginal revenue curve associated with the following demand curve faced by a monopolist or a monopolistic competitor.(GRAPH CAN'T COPY)
Use the following graph to answer the following questions:(GRAPH CAN'T COPY)a. What price is charged by the monopolist in order to maximize profits?b. Calculate the total revenue accruing to the monopolist at the profit-maximizing output.c. Calculate the total cost to the monopolist at the profit-maximizing output.d. Calculate the profit for the monopolist.e. Calculate the total variable and fixed costs of the monopolist at the profit-maximizing output.f. Now assume the $M C$ curve represents market supply for a perfectly comperitive market. What would the equilibrium price and quantity be for perfect competition? Are consumers better off or worse off with perfect competition or monopoly?
List differences and similarities among monopolies, oligopolies, and monopolistic competition. Be prepared to give examples of each form of imperfect competition on the selling side.
(TABLE CAN'T COPY)a. Calculate the total input cost and the marginal input cost.b. If the marginal value or marginal revenue products were 4 , what would be the profitmaximizing level of input?
a. Find the equilibrium price and quantity for a monopsonist in the following graph.b. Find the equilibrium price and quantity under perfect competition in the following graph.c. What is the magnitude of monopsonistic exploitation?(GRAPH CAN'T COPY)
Explain the significance of the following acts:a. Clayton Actb. Capper-Volstead Actc. Packers and Stockyards Act
List and explain the various measures that may be employed to counteract possible adverse effects of imperfect competition in the marketplace.
On the following graph, show the effect of a lumpsum tax on a monopolist.(GRAPH CAN'T COPY)
Using the following graph, answer questions (a) through (d).(GRAPH CAN'T COPY)a. What are the profit-maximizing price and quantity levels for the monopolist?b. Calculate profit.c. Suppose the government imposes a price ceiling of $$\$ 40$$. Now what is the optimal price and quantity combination?d. Calculate the new level of profit.
This graph pertains to a firm labeled as a monopolistic competitor.(GRAPH CAN'T COPY)If the demand curve were to intersect the quantity axis, the quantity demanded would be equal to ________ units. This monopolistic competitor could produce ________ units and charge a price of ________ Under perfect competition, what output would be produced? What would be the corresponding market price?Which of the following is true about monopolistic competition? (Circle all that apply.)a. There is product differentiation.b. There are few sellers.c. The food retailing industry is an example of this market structure.d. No firm can influence market prices.
Select the correct answers for conditions of oligopoly.a. Number of sellersi. manyii. fewiii. oned. Product differentiationi. yesii. noWhich of the following illustrates an oligopoly? (You may select more than one.)a. Retail food industryb. Airline industryc. A utility (electric) companyd. Farm machinery manufacturers
Marginal input cost (MIC) refers to which of the following? (Circle the correct answer.)a. The change in total cost when producing one more unit of outputb. The change in total revenue when using one more unit of inputc. The change in total cost when using one more unit of inputd. The change in total revenue when producing one more unit of output
The economic analysis of imperfect competition was originated by _________ and _________.
Measures to lessen the possible adverse effects of imperfect competition are called _________.
The arrangement among producers and processors of agricultural commodities in which the chief goal is to improve income is called a(n) _________.
In the United States, the government agency charged with the responsibility of investigating business organizations and practices is the _________.
In the beef processing industry, three firmsConagra, Excel, and IBP_comprise roughly $85 \%$ of the buying side of the market. This situation characterizes a( $n$ ) _________.
The social costs of imperfect competition are known as _________.
A situation designed to increase or maintain profits through price fixing and/or to restrict entry of new firms in an industry is called _________.
A cooperative pool formed by oligopolists to set prices at artificially high levels is known as a(n) ______.
Attempts to increase the demand for a product or service via product differentiation are known as ______.
A market structure in which there are many buyers with the capacity of differentiating services (i.e., location of processing facilities; willingness to provide credit) is called a(n) ______.
Federal marketing orders were created in 1937 by way of which legislative act? ______.
For questions 24 tbrougb 28, circle the corrat ansuer.Which of the following is/are a common barrier(s) to entry?a. Economies of scaleb. Absolute unit-cost advantagesc. Capical access and costsd. All of the above
For questions 24 tbrougb 28, circle the corrat ansuer.The first piece of legislation prohibiting monopoly and other restrictive business practices was thea. Clayton Act of 1914.b. Packers and Stockyards Act of 1921 .c. Capper-Volstead Act of 1922 .d. None of the above.
For questions 24 tbrougb 28, circle the corrat ansuer. The Capper-Volstead Act of 1922a. reinforced anti-trust laws regarding livestock marketing.b. was the principal legislation exempting cooperatives from anti-trust laws.c. plugged loopholes in the Sherman Antitrust Act of 1890.d. all of the above.
For questions 24 tbrougb 28, circle the corrat ansuer.The piece of legislation that not only plugged loopholes in the Sherman Antitrust Act of 1890 but also created the Federal Trade Commission wasa. the Packers and Stockyards Act of 1921.b. the Clayton Act of 1914 .c. the Capper-Volstead Act of 1922.d. none of the above.
For questions 24 tbrougb 28, circle the corrat ansuer.If the government were to impose a lump-sum tax on a monopolist, what is likely to happen to the quantity produced of a commodity and the price charged relative to the situation where no lumpsum tax is imposed?a. The price would fall, but the quantity produced would rise.b. The price would fall and the quanticy produced would fall.c. The price would remain the same and the quantity produced would fall.d. No change in price or quantity produced would occur, only a reduction in profit.
Monopolists will offer a lower price and buy more input than firms engaging in perfect competition. $T$ $F$(GRAPH CAN'T COPY)
Use the following graph to answer questions 30 through 34.Which of the following does this graph illustrate?a. Monopoly in the short runb. Monopolistic competition in the short runc. Perfect competitiond. Both (a) and (b)
Use the following graph to answer questions 30 through 34.What is the price charged and the output produced by the firm in order to maximize profits?a. $$P=\$ 2, Q=3,000$$b. $$P=\$ 3, Q=4,000$$c. $$P=\$ 4, Q=3,000$$d. $$P=\$ 2.50, Q=3,000$$
Use the following graph to answer questions 30 through 34.The maximum profit under imperfect competition isa. $$-\$ 1,500$$.b. $$\$ 1,500$$.c. $$\$ 4,500$$.d. $$\$ 12,000$$.
Use the following graph to answer questions 30 through 34.$X$ is equal toa. 3,500 .b. 3,600 .c. 3,800 .d. can't tell; insufficient information.
Use the following graph to answer questions 30 through 34.Suppose the government imposes a price ceiling of $$\$3$$. Which of the following is (are) false?a. In this situation, the price cannot exceed $$\$ 3$$.b. Under this situation, $$P=\$ 3, Q=4,000$$.c. The profit accruing to this firm is $$\$ 12,000$$.d. None of the above.
Use the graph below to answer questions 35 through 37.(GRAPH CAN'T COPY)What is the equilibrium quantity of input used and what is the price paid per unit under the condition of perfect competition?a. $Q_{\text {input }}=1,600, P_{\text {inpat }}=5$b. $Q_{\text {input }}=1,600, P_{\text {inpat }}=2.75$c. $Q_{\text {input }}=2,000, P_{\text {input }}=3.25$d. None of the above
Use the graph below to answer questions 35 through 37.(GRAPH CAN'T COPY)What is the equilibrium quantity of input used and what is the price paid per unit under the condiction of monopsony?a. $Q_{\text {input }}=1,600, P_{\text {input }}=5$b. $Q_{\text {input }}=1,600, P_{\text {input }}=2.75$c. $Q_{\text {input }}=2,000, P_{\text {input }}=3.25$d. None of the above
Use the graph below to answer questions 35 through 37.(GRAPH CAN'T COPY)What is the magnitude of monopsonistic exploitcion on a per-unit basis?a. $$\$ 2.25$$b. $$\$ 1.75$$c. $$\$ 0.50$$d. None of the above