Question 1 What is this curve and why? 16 Marginal cost 14 12 10 - Marginal Cost/Marginal Revenue ($) Average cost E Marginal N revenue O 0 20 40 60 80 100 120 100 Quantity (packs of raspberries) (b) Price equals cost . Monopolistic competition, Price is somewhat above the cost but less than Monopoly. ". Oligopoly, price is set by a few players in the market so the curve maybe kinked. ".PC, competition has driven price down to equal cost. ON. Monopoly, Price is twice the cost.Question 2 What type of graph is this? O Monopolistic competition where some profit margin is made by advertising to differentiate products. 0 Monopoly where demand makes Price higher than MC cost by 2 times. 0 PC, where price is driven down to MC cost by competition. 1o poinls 5m Answer O Oligopoly where few competitors may cheat on copperative pricing and make kinked demand curve where the price change is made by the competitors. Qpestion 3 1o What are the characteristics of Perfect Competition? 0" Few firms with partial control of resources that limit new entry to the market. 0'\" Many firms with heterogeneous of differentiated goods that rely on advertising to earn extra profits by brand loyalty. O""Clne main firm with 1000/0 market power over a technology or resource and no significant entry to the market. 0 'V'Many firms with homogeneous goods and easy entry and exit to the market. Question 4 What are the four types of Firm Market structure? 0" Perfect Competition, Monopoly, Oligopoly, Monopolistic. O \"' Marginal costs, Average costs, Fixed costs, Variable costs. O\""Diminishing Returns, Increasing Returns, Constant Returns and Profits. O'V'Monopoly, Scrabble, Trivial Pursuit, Battleship. Question 5 1o pain: 5. What are the characteristics of Monopoly? 0" One large firm with 100%: market power over a unique resource or technology. 0 "' Many firms with heterogeneous or differentiated goods that rely on advertising to earn extra profits by brand loyalty. 0 ""Many firms with heterogeneous products and easy entry and exit to the market. 0 \"Few firms with some market power over a particular resource or product. Question 6 10 poinll What are the characteristics of an Oligopoly? O " Few firms with partial market power over a technology or resource and limited entry to the market. 0 "' One firm with 100% market power over a technology or resource and No entry to the market. 0 "" Many firms with a homogeneous product and easy entry and exit to the market. 0 \""Many firms with heterogeneous of differentiated goods that rely on advertising to earn extra profits by brand loyalty. Question 7 What type of graph is this? Loss Profit Loss 800 - Total cost 600 Total revenue Total Cost/Total Revenue ($) 400 Profit = 75 200 Profit = 75 20 40 60 80 100 120 140 Quantity (packs of raspberries) Profit 91. MR = AC where all firms produce. " AR = AC where all firms produce. ". MR = MC where all firms produce. OW. AVC = MC where some firms produce.Question 8 10 points Save Answer What type of graph is this? 35 30 - Marginal cost 25 Total profit (40, $16) Price ($) Average cost Total cost Demand Marginal revenue -10 10 20 30 40 50 60 70 80 90 Quantity Figure 10.3 How a Monopolistic Competitor Chooses its Profit Maximizing Output and Price To maximize profits. the Authentic Chinese Pizza shop would choose a quantity where marginal revenue equals marginal cost, or @ where MR = MC. Here it would choose a quantity of 40 and a price of $16. 0. Monopoly where demand is higher than MC cost by two times. " Monopolistic competition, with some profit gained by advertising a differentated 'better' product. ".PC where competition drives price down to equal cost. W.Oligopoly, where cheating on price cooperation between few large firms kinks the demand curve where they change the price to gain market share.Question 9 1 What is the characteristic of monopolistic firms? 0 " Many firms with homogeneous products and easy entry and exit to the market. 0 \"' Few firms with partial market power over a technology or resource and limited entry to the market. 0 \"" Many firms with heterogeneous or differentiated products that rely on advertising to build brand loyalty and charge a higher prot margin. 0 ""One firm with 100% market power over a technology or resource and NO entry to the market. Question 10 What type of graph is this? $600 (5,000, $550) (10,000, $500) $500 $400 Price ($) (11,000, $300) $300 $200 $100 0 5,000 10,000 15,000 20,000 Quantity Figure 10.5 A Kinked Demand Curve Consider a member firm in an oligopoly cartel that is supposed to produce a quantity of 10,000 and sell at a price of $500. The other members of the cartel can encourage this firm to honor its commitments by acting so that the firm faces a kinked demand curve. If the oligopolist attempts to expand output and reduce price slightly, other firms also cut prices immediately-so if the firm expands output to 11,000, the price per unit falls dramatically, to $300. On the other side, if the oligopoly attempts to raise its price, other irms will not do so, so if the firm raises its price to $550, its sales decline sharply to 5,000. Thus, the members of a cartel can discipline each other to stick to the pre-agreed levels of quantity and price through a strategy of matching all price cuts but not matching any price increases O. Monopolistic competition, some profit margin exists over cost due to ads and differentiated products. Ol. Monopoly, price is twice marginal cost. "Oligopoly, different few competitors cheat on cooperative price and the demand curve kinks at those breakoff prices. ON.PC, Competition drives cost down to price