ECON 101 Quiz: ECON 101 IA State Quiz1 S2001
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Suppose that each firm in a competitive industry has the following costs:
Total Cost: TC=50+1/2 q2
Marginal Cost: MC=q
where q is an individual firm's quantity produced.
The market demand curve for this product is:
Demand QD=140-2P
where P is the price and Q is the total quantity of the good.
Each firm's fixed cost is $__________
What is each firm's variable cost?
_______ 50+1/2q
_______1/2q
_______q
_______1/2q2
Which of the following represents the equation for each firm's average total cost?
_____ 50/q
_______ 50/q+1/2q
_______1/2q
_______50+1/2q
Complete the following table by computing the marginal cost and average total cost for from 5 to 15.
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
10 | ||
11 | ||
12 | ||
13 | ||
14 | ||
15 |
The average total cost is at its minimum when the quantity each firm produces (q) iquals ________
Which of the following represents the equation for each firm's supply curve in the short run?
_______1/2q2
______q
_____50-q
_____120-1/2q2
In the long run, the firm will remain in the market and produce if________
Currently, there are 8 firms in the market.
In the short run, in which the number of firms is fixed, the equilibrium price is__________ In the short run, in which the number of firms is fixed, the equilibrium price is
________units. Each firm produces ________ nits. (Hint: Total supply in the market equals the number of firms times the quantity supplied by each firm.)
In this equilibrium, each firm makes a profit of _______ . (Note: Enter a negative number if the firm is incurring a loss.)
Firms have an incentive to EXIT/ENTER the market.
In the long run, with free entry and exit, the equilibrium price is _______and the total quantity produced in the market is__________units. There are ________
firms in the market, with each firm producing _________units.
The following table shows the demand curve and cost information for a firm that is monopoly
Price | Quantity | TC |
$10 | 0 | $500 |
$9 | 200 | $1,000 |
$8 | 400 | $1,600 |
$7 | 600 | $2,500 |
$6 | 800 | $4,000 |
What quantity should they produce to maximize their profits?
200 units
400 units
800 units
600 units
Mary competes in a monopolistically competitive market. Suddenly, 5 new firms enter the market causing her perceived demand curve to shift. The following tables show her original and new demand curves and her cost information.
Assume that Mary can only choose from the quantities of output given in the table. By how will the quantity that she produces change after the new firms enter the market?
Original Demand Curve
Price | quantity | TC |
30 | 0 | $130 |
25 | 10 | $140 |
20 | 20 | $260 |
15 | 30 | $450 |
10 | 40 | $660 |
New Demand Curve
25 | 0 | $130 |
20 | 10 | $140 |
15 | 20 | $260 |
10 | 30 | $450 |
5 | 40 | $660 |
Decrease by 5
Decrease by 10
Increase by 10
Increase by 5
Monopolistic competitor has the following information about cost and demand
Quantity | Price($) | Total Revenue ($) | Marginal Revenue ($) | Total Cost ($) | Marginal Cost ($) | Average Cost ($) |
0 | 25 | 0 | 25 | 30 | ---- | ---- |
2 | 24 | 48 | 23 | 35 | 2.5 | 17.5 |
4 | 23 | 92 | 21 | 45 | 5 | 11.25 |
6 | 22 | 132 | 19 | 60 | 7.5 | 10 |
8 | 21 | 168 | 17 | 77 | 8.5 | 9.63 |
10 | 20 | 200 | 15 | 100 | 11.5 | 10 |
12 | 19 | 228 | 13 | 126 | 13 | 10.5 |
14 | 18 | 252 | 11 | 165 | 19.5 | 11.79 |
16 | 17 | 272 | 9 | 210 | 22.5 | 13.13 |
18 | 16 | 288 | 7 | 260 | 25 | 14.44 |
20 | 15 | 300 | 5 | 320 | 30 | 16 |
If this industry was perfectly competitive, what price would the good sell for?
$19
$23
$21
$15
Monopolistic competitor has the following information about cost and demand
Quantity | Price($) | Total Revenue ($) | Marginal Revenue ($) | Total Cost ($) | Marginal Cost ($) | Average Cost ($) |
0 | 25 | 0 | 25 | 30 | ---- | ---- |
2 | 24 | 48 | 23 | 35 | 2.5 | 17.5 |
4 | 23 | 92 | 21 | 45 | 5 | 11.25 |
6 | 22 | 132 | 19 | 60 | 7.5 | 10 |
8 | 21 | 168 | 17 | 77 | 8.5 | 9.63 |
10 | 20 | 200 | 15 | 100 | 11.5 | 10 |
12 | 19 | 228 | 13 | 126 | 13 | 10.5 |
14 | 18 | 252 | 11 | 165 | 19.5 | 11.79 |
16 | 17 | 272 | 9 | 210 | 22.5 | 13.13 |
18 | 16 | 288 | 7 | 260 | 25 | 14.44 |
20 | 15 | 300 | 5 | 320 | 30 | 16 |
What will the firm