When firms can perfectly price-discriminate, both _____ and marginal revenue are higher.

1. profits
2. total cost
3. marginal cost
4. total revenue

In perfect price discrimination, marginal revenue equals:

1. average total cost.
2. total cost.
3. price.
4. total revenue.

When advertising occurs in a perfectly competitive market, it is generally promoting the:

1. individual firm.
2. industry as a whole.
3. firms that are subsidized by the government.
4. firm's owner.

A firm's products may become less price elastic as advertising:

1. decreases costs.
2. increases supply.
3. increases brand loyalty.
4. decreases price

When firms can perfectly price discriminate, both total revenue and _____ are higher.

1. marginal revenue
2. profits
3. marginal cost
4. total cost

Unlike a monopoly, firms in monopolistic competition are faced with:

1. high barriers to entry.
2. intense competition.
3. standardized products.
4. inelastic price elasticity of demand.

Unlike firms that are in perfect competition, firms in monopolistic competition have:

1. differentiated products.
2. no price-setting ability.
3. intense competition.
4. high barriers to entry.

Demand is less price elastic in monopolistic competition than in perfect competition due to:

1. high entry barriers.
2. product standardization.
3. long-run economic profits.
4. product differentiation.

_____ is the real or perceived distinction between products that are close substitutes.

1. Product differentiation
2. Customer consideration
3. Customer preference
4. Product attraction

At a price of $18, the marginal revenue of a monopolistically competitive firm is $12. If the marginal cost of production is $10, what should the monopolist do?

(hint:what needs to happen to Q, and what change in P will cause it)

1. Increase its price.
2. Keep its price at the same level.
3. Decrease its price.
4. not enough information to solve

If short-run economic profits are greater than zero for firms in a monopolistically competitive market, in the long run we expect:

1. competing firms to enter the market and sell similar products.
2. the demand curve for firms in the market to shift to the right.
3. entry barriers to prevent competing firms from entering this market.
4. profits to increase.

The term "rent seeking" best describes a situation in which:

1. individuals expend effort searching for a good price on an apartment.
2. firms use resources to secure or preserve a monopoly in providing a good or service.
3. consumers compete for a limited quantity of the good.
4. None of the above are good descriptions of rent-seeking behavior.

An example of a _____ monopoly occurs when governments impose licensing requirements on taxis.

1. low
2. natural
3. consumer
4. legal

_____ regulations result in zero economic profit for a regulated natural monopoly.

1. Marginal cost pricing
2. Average cost pricing
3. Antitrust
4. Total cost pricing

A _____ monopoly occurs when a firm or government has control over the supply of a natural resource.

1. utility
2. natural
3. natural resource
4. network