30. If the optimal markup on cost is 25%, the optimal markup on price is:

a) 20%

b) 25%

c) 50%

d) 100%

31.The competitive market pricing rule-of-thumb for profit maximization is to set:

a) MR > MC

b) MR = MC

c) P = MC/[1 + (1/E_P)]

d) MC = MR/[1 + (1/E_P)]

32. What is the Herfindahl-Hirschman Index (HHI) for an industry in which five firms each control 20% of the market?

a.20

b.100

c.2,000

d.5,000

33.Which of the following pieces of antitrust legislation banned tying contracts, limited mergers, and banned price discrimination?

a.The Sherman Act.

b.The Wheeler-Lea Act.

c.The Clayton Act.

d.The same legislation that created the Interstate Commerce Commission (ICC).

34. Refer to the gure below. How much prot does the prot-maximizing monopoly earn? MR Units of output, Q a. $Q $6,000 0. $5,040d. $10 6. $960 35. Refer to the gure below. From the structure of cost and revenue of the rm, we would predict that this monopoly will: a. Shut down in the short run and go out of business in the long run. b. Shut down in the short run but continue to operate in the long run. 0. Operate in the short run but go out of business in the long run. d. Operate ATC MC E AVC E 3 . v Demand Units of output, Q 36. Refer to the gure below. How much is consumer surplus in the monopoly outcome? a. Area C; b. Area R; 0. Area D; d. Area C + D; e. Area C + R + D Dollars ($) MR Units of output, Q 37. Refer to the gure below. To maximize prot, what price should the firm charge? a. $18; b. $15; 0. $8; d. $4 Price $18 % $15 '5 =0 $ 1 2 :1 $8 $6 0 600 900 Units of output, Q 38. Refer to the gure below. The rm in question exhibits economies of scale: Cost per unit (5) 0 Q0 Quantity a. Along the decreasing portion of the long-run average cost curve (LRAC), up until Qo. b. Along the increasing portion of the long-run average cost curve (LRAC), after Q0. 0. At Q}, where LRAC is minimum. d. Anywhere along the LRAC, as long as increasing the scale of operations does not affect cost per unit. Use the following table, which provides long-run information about the market for apples, to answer the next two questions. Price is price per pound of apples. Quantity Price Marginal Marginal Average = (pounds) per Pound Revenue Cost Total Cost 100 $1.40 $2.00 200 $1.07 $0.74 $0.50 $1.50 300 $0.92 $0.62 $0.46 $0.75 400 $0.80 $0.44 $0.44 $0.70 500 $0.66 $0.10 $0.43 $0.65 600 $0.50 - $0.30 $0.50 $0.50 700 $0.30 - $0.80 $0.59 $1.00