1. Since the beginning of the millennium, the United States has witnessed closure of many Internet start-up companies. Many companies closed in the long run because:

1. the price they were charging was too high to attract customers.

2. the price they were charging was too low to provide sufficient revenues.

3. they were not earning enough revenue to cover their average variable costs.

4. the price is less than the average total costs.

5. they were not earning enough revenue to cover their total fixed cost

2. Under perfect competition, at the profit-maximizing level of output:

1. the average revenue curve is upward sloping.

2. price is equal to marginal revenue.

3. the marginal revenue curve is upward sloping.

4. marginal revenue is equal to zero.

5. price is greater than marginal revenue.

3. Which of the following characteristics distinguishes oligopoly from other market structures?

1. An oligopolist does not face a downward-sloping demand curve.

2. Firms operating in an oligopoly are interdependent.

3. Firms operating in an oligopoly are independent of each other.

4. Entry into an oligopolistic market is easier than entry into a monopolistically competitive market.

5. Oligopoly is the simplest of all the other market structures.

4. A monopolist maximizes profit:

1. by charging a price that equals its marginal cost.

2. by producing a level of output where marginal revenue is greater than and closet to being equal to marginal cost.

3. by charging the highest possible price on the demand curve.

4. by producing a level of output where the average-cost curve intersects the demand curve.

5. by charging a price equal to its average total cost.

5. A(n) ____ is a price maker.

1. average-fixed-cost

2. marginal cost

3. average-variable-cost

4. total fixed cost

5. average-total-cost