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1.A firm called Pitus is operating in a monopolistically competitive market. Currently, it is maximizing profit with an output of 1,200 units and a price of $5. Based on this info, which of the following statements must be true?

a. Pitus needs to change their location and settlement to go higher than $500.

b. Pitus could not sell more units by lowering its price.

c. Pitus is earning normal profit.

d. Pitus is earning $3,600 in profit.

e. Pitus has a marginal revenue less than $5.

f. Pitus has a marginal revenue greater than $5.

g. None of the above

2.Sunny Double sells vials of asteroid dust. At its current production level, its marginal revenue is lower than the demand curve. This means that :

a. Sunny Double is the best seller in all the markets over the world.

b.the firm is experiencing economic losses

c.the firm has market power

c.the firm is not producing at its profit-maximizing quantity

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

e.the firm is productively efficient

f. not enough information.

g. none of the above.

3. Essentially, what is the key difference between monopolistic competition and an oligopoly market?

a.Upon an oligopoly, the number of firms is so small they strategize their production interdependently.

b.Upon a monopolistic competition, the marginal revenue is beneath the demand curve because of market power.

c. Theoligopolies generally have a lower market concentration and a lower minimum efficient scale.

d.The monopolistically competitive markets have more significant barriers to entry into and exit from the industry.

e.The oligopolies see consistent economies of scale across their entire product demand.

f. None of the above.

g. All the above.

4. Tursh is monopolistically competitive firm in the long-run equilibrium. Which of the following must be true based on this information?

a. The product price = ATC.

b. The firm is essentially earning positive economic profits.

c.The firm is allocatively efficient.

d.The firm is productively efficient.

e.The output quantity is where MC = D.

f. None of the above.

g. All the above.

5.Moreover, the allocatively efficient quantity of product M for the whole market is 2 million units specifically. Upon that quantity, the demand for M is at $5 and the average total cost for its single supplier is $7. By this the average total cost does not fall to $5 until 3.5 million units. Based on this data, the market for product M is :

a. productively efficient

b. a legal monopoly

c. a natural monopoly

d.monopolistically competitive

e. operating with decreasing returns to scale

f. None of the above

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

a.It can be said that the price is greater than average total cost at the quantity where marginal revenue is equal to marginal cost.

b.It can be said that the price is less than average total cost at the quantity where marginal revenue equals marginal cost.

c.It can be said that the price is equal to average total cost, and marginal revenue is less than marginal cost.

d.It can be said that the price is greater than average total cost at the quantity where marginal revenue is less than marginal cost.

e.It can be said that the price is equal to average total cost at the quantity where marginal revenue equals marginal cost.

f. None of the above.

7. Stirel is a firm which operates as a monopolist in a small tourist town in Italy. It rents apartments, similar in structure etc.. , to tourists. In previous years, Stirel has reduced the rental price in order to rent out additional apartments. Yet, the reduction in the price reduced the firm's profits. Currently this year, the company uses perfect price discrimination to charge for each incremental apartment. Based on this information which of the following would be true due to the firm's price discrimination?

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

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

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

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

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

f. None of the above.

8. It can be seen that the minimum efficient scale for a good is beyond the point of output where marginal cost intersects the demand curve. This means and describes:

a. comparative advantage

b.a natural monopoly

c.market power

d. diseconomies of scale

e.a legal monopoly

f. none of the above.

9. It can be said that company T and company R are each tele-communications manufacturers. Both companies manufacture the same products, and they make their decisions based on the other's actions essentially. Both companies are considering opening retail outlets to increase their profits. The payoff matrix shows the profits of the companies in millions of dollars if they choose to open retail outlets.

Company R Company T Retail outlets No retail outlets Retail outlets $25, $25 $30, $15 No retail outlets $35, $35 $34, $20