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The University of Adelaide - ECON 7200 1)If a perfectly competitive firm's price is less than average total cost but greater than average variable cost, the firm:       2

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The University of Adelaide - ECON 7200

1)If a perfectly competitive firm's price is less than average total cost but greater than average variable cost, the firm:

 

 

 

2. A natural monopoly is protected by a barrier to entry that takes the form of:

 

 

3. If a monopolist's price is $50 at 63 units of output and marginal revenue equals marginal cost and average total cost equals $43, then the firm's total profit is:

.

  4. A virtuous cycle is:

 

 

 

5. A perfectly competitive industry achieves allocative efficiency because:

.

6. When a competitive firm finds that the market price is below its minimum average variable cost level, it will sell:

 

 

7. When a proposed merger between two companies is being reviewed by the Australian Competition and Consumer Commission, the relevant market is defined by:

 

 

8. The total profit of a perfectly competitive firm can be calculated as:

9. A perfectly competitive industry achieves allocative efficiency in the long run. What does allocative efficiency mean?

10. An industry's long-run supply curve shows:

11. For a natural monopoly:

12. If a monopolist's price is $150 per unit, marginal revenue is $100 for the last unit produced and its marginal cost for the last unit produced is $100, then:

13. Letters are used to represent the terms used to answer this question: price (P), quantity of output (Q), total cost (TC) and average total cost (ATC). Which of the following equations is equal to a firm's profit?

14. Which of the following is true for a monopolist?

15. If the market price is $25, the average revenue of selling five units is:

16. To sell more output, the monopolist:

17How are sunk costs and fixed costs related?

 

18. If a monopolist's marginal revenue is $35 for the last unit produced and its marginal cost is $30, then:

 

 

19. If average total costs are ATC₂, the firm in Figure 8.2 will:

20. The profit-maximising price for the firm in Figure 8.2 is:

21. To profit maximise, the firm in Figure 8.2 will produce:

 

 

22.  Compared to perfect competition, a monopoly:

23. If average total costs are ATC₁, the firm in Figure 8.2 will:

24.   If a typical firm in a perfectly competitive industry is earning profits, then: