7. Economic analysis of a pure competition compared to imperfectly competitive firms is illustrated by differences in: A) how marginal revenue relates to demand B) how the profit maximizing price and quantity is determined C) how the cost curves are calculated and subsequently drawn D) how the "Shutdown Rule" is applied. E) how profit, loss and total revenue are calculated 8. The kinked-demand curve of an oligopolist is based on the assumption that: A) competitors will match both price cuts and price increases due to the tendency for firms to cheat in a cartel situation. B) competitors will ignore a price cut but follow a price increase. C) demand is more elastic when firms act alone in price changes, rather than when firms follow those price changes. D) as economic profits are realized by one firm, other firms will enter the market and the decrease in demand will decrease the single firm's profit E) collusion will lead to a vertical gap in the marginal revenue curve 9. An imperfectly competitive firm's demand curve is not the same as its marginal revenue because: A) total revenue is a straight, upsloping line because a firm's sales are independent of product price. B) the marginal revenue curve decreases more than the demand curve because any reduction in price applies to all units sold. C) the marginal revenue curve increases more than the demand curve because any reduction in price applies to all units sold. D) the marginal revenue curve decreases more than the demand curve because any reduction in price applies only to the extra unit sold. 19 (A 10. A perfectly price discriminating pure monopolist: A) produces the socially optimum quantity. B) produces less output than a non-price discriminating monopoly. C) charges a price which equals the buyer's marginal cost. D) provides a larger amount of consumer surplus that a non-price discriminating monopoly. E) none of the choices 11. As a percent of a firm's operations, expenditures on research and development on new product lines are likely highest in: A) monopolistically competitive markets B) purely competitive markets C) monopolistic markets D) both monopolistically competitive and perfectly competitive markets. econom boisde A E) All firms that make economic profit in the long run