profit maximizing under perfect competition and monopoly Mcqs
51. Economic profits are ?
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A. the opportunity costs of all inputs

B. the difference between total revenue and total costs.

C. a rate of profit that is just sufficient to keep owners and investors satisfied

D. anything greater than the normal opportunity cost of investing
52. The short run, as economists use the phrase, in characterized by ?
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A. at least one fixed factor of production and firms neither leaving nor entering the industry.

B. a period where the law of diminishing returns does not hold

C. all inputs being variable

D. no variable inputs that is, all of the factors of production are fixed

53. Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? the monopolist has?
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A. maximized its total revenue

B. maximized the difference between marginal revenue and marginal cost.

C. set price equal to its average cost

D. equated marginal revenue and marginal cost
54. Which of the following is most likely to be a variable cost for a firm ?
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A. The interest payments made on loans.

B. The franchisers fee that a restaurant must pay to the national restaurant chain

C. The payroll taxes that are paid on employee wages.

D. The monthly rent on office space that it leased for a year

55. The formula for average fixed costs is ?
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A. Dq/DTFC

B. TFC/q

C. q/TFC

D. TFC q

56. Marginal revenue is ?
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A. the additional profit the firms earns when it sells an additional unit of output

B. the difference between total revenue and total cost

C. The ratio of total revenue to quantity.

D. the added revenue that a firm takes in when it increases output by one additional unit.
57. A market is defined as perfectly contestable if ?
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A. entry to it is costly but exit from it is costless

B. entry to it and exit from it are both costless

C. entry to it and exit from it are both costly

D. entry to ti costless but exist from it is costly

58. Market power is ?
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A. a firms ability to charge any price it likes

B. a firms ability to raise price without losing all demand for its product

C. a firms ability to monopolies a market completely.

D. a firms ability to sell any amount of output it desires at the market-determined price.

59. An oligopoly with a dominant price leader will produce a level of output ?
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A. between that which would prevail under competition and that which a monopolistic competitor would choose in the same industry.

B. equal to what a monopolist would choose in the same industry

C. that would prevail under competition

D. between that which would prevail under competition and that which a monopolist would choose in the same industry
60. Profit-maximizing firms want to maximize the difference between ?
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A. marginal revenue and marginal cost.

B. total revenue and total cost

C. total revenue and marginal cost

D. marginal revenue and average cost