Question 1. In the market structure called monopolistic competition (Points : 1.25)

05 Jun Question 1. In the market structure called monopolistic competition (Points : 1.25)

Question
1. In the market structure called monopolistic competition (Points : 1.25)

a) Very little advertising will occur

b) There are only a few companies in the industry

c) These industries offer only few products

d) None of the above

Question 2. 2. In a purely competitive industry (Points : 1.25)

a) Products are differentiated

b) A large amount of advertising occurs

c) Price will be higher than in other market structure

d) None of the above

Question 3. 3. A used lawn mower is an example of (Points : 1.25)

a) a search good

b) an experience good

c) a homogenous good

d) None of the above

Question 4. 4. The problem of asymmetric can be overcome by (Points : 1.25)

a) Reputation

b) Brand name

c) Warranties

d) All of the above

e) None of the above

Question 5. 5. A monopolist will always charge a higher price than a purely competitive industry (Points : 1.25)

True

False

Question 6. 6. Given TC = 10 + 5Q, Ed = -2, what price will be a monopolist charge? (Points : 1.25)

a) 5

b) 12

c) 8

d) 10

e) None of the above

7. The monopolist determines optimal output the same way as does a purely competitive industry (Points : 1.25)

True

False

Question 8. 8. Given a company with some monopoly power and Ed=3, the optimal markup is (Points : 1.25)

a) 33%

b) 50%

c) 72%

d) None of the above

Question 9. 9. Given the information given in 8 above and MC=6, gross margin is (Points : 1.25)

a) 50%

b) 42%

c) 33%

d) 38%

e) None of the above

Question 10. 10. You would expect gross margin in a store brand to be higher than gross margin in a brand name product (Points : 1.25)

True

False

Question 11. 11. You expect products that are less price elastic to have lower gross margins than products with greater price elasticity (Points : 1.25)

True

False

Question 12. 12. A company with large gross margins will have large profits (Points : 1.25)

True

False

13. If a company is incurring losses, it should stop operating (Points : 1.25)

a) Yes

b) No

c) Not enough information

Question 14. 14. A monopolist may not charge the highest price they could get (at MR=MC) in the short run (Points : 1.25)

True

False