1.Saturn Unlimited sells vials of asteroid dust. At its current production level, its marginal revenue is lower than the demand curve. This means that

the firm is experiencing economic losses

the firm has market power

the firm is not producing at its profit-maximizing quantity

an increase in the firm's output will increase its profits

the firm is productively efficient

2.Verslas is a firm operating in a monopolistically competitive market. It is currently maximizing profit with an output of 1,200 units and a price of $5. Based on this information, which of the following statements must be true?

Verslas could not sell more units by lowering its price.

Verslas is earning normal profit.

Verslas is earning $3,600 in profit.

Verslas has a marginal revenue less than $5.

Verslas has a marginal revenue greater than $5.

3.The minimum efficient scale for a good is beyond the point of output where marginal cost intersects the demand curve. This describes

diseconomies of scale

a legal monopoly

market power

comparative advantage

a natural monopoly

4.The allocatively efficient quantity of widgets for the whole market is 10 million units. At that quantity, the demand for widgets is at $10. However, the single supplier of widgets is producing 5 million units and charging $20 per widget. Based on this data, the market for widgets is

a monopoly

an oligopoly

productively efficient

operating at minimum efficient scale

experiencing economic losses

5.A firm operates as a monopolist in a small tourist town. It rents apartments, similar in structure, to tourists. In previous years, the company reduced the rental price in order to rent out additional apartments. The reduction in price reduced the firm's profits. In the current year, the company uses perfect price discrimination to charge for each incremental apartment. Which of the following is true due to the firm's price discrimination?

The consumer surplus increases, and the firm's surplus decreases.

The average price decreases, which reduces the total revenue from the first units sold.

The company's total economic profits decrease as the new price charged impacts all units sold.

Allocation of resources becomes even more inefficient, creating a greater deadweight loss.

The demand is equal to marginal revenue, which equals marginal cost for the last unit sold.

6.A monopolistically competitive firm is in long-run equilibrium. Which of the following must be true?

The firm is earning positive economic profits.

The firm is allocatively efficient.

The firm is productively efficient.

The output quantity is where MC = D.

The product price = ATC.

7.A firm operating in monopolistic competition is maximizing its profit and earning positive economic profits. Which of the following must be true of its production?

The price is equal to average total cost at the quantity where marginal revenue equals marginal cost.

The price is equal to average total cost, and marginal revenue is less than marginal cost.

The price is less than average total cost at the quantity where marginal revenue equals marginal cost.

The price is greater than average total cost at the quantity where marginal revenue is less than marginal cost.

The price is greater than average total cost at the quantity where marginal revenue is equal to marginal cost.

8.What market structure is characterized by production strategies that take into account other firms' possible production decisions? (2 points)

Perfect competition

Monopolistic competition

Oligopoly

Classic monopoly

Natural monopoly

9.An oligopoly market produces ________ output and charges a ________ price than a perfectly competitive market. (2 points)

equal; higher

greater; lower

less; lower

less; higher

equal; lower