MCQ

QUESTION 15

The study ofMarket Structureshelps us to understand the concept of market power.Which of the following statement is true?

1. The higher the industry concentration ratio,the greater the market power
2. individual firms in a competitive environmenthave little, if any market power
3. firms which are price-takers have little,if any market power
4. firms which are price-setters have market power
5. All of the above are accurate.

1 points

QUESTION 16

Assume that a firm is operating at capacity.As sales decline,they can reduce their outputin the short term. As a result of this decision ;

1. AVC willincrease
2. AFC will increase
3. ATC will decrease
4. FC will increase

1 points

QUESTION 17

In order to maximize profit, a firm will produce at the point where;

1. MR is greater than the market price
2. marginal cost and marginal revenue are equal
3. average worker productivity is at its highest
4. economies of scale can no longer be achieved
5. the sum of the consumer and producer surplusesare maximized