[Solved] The Following Graph Shows the Costs and Revenues of a Typical
Question 26
Multiple Choice
Question 26The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry.
-Refer to the graph above to answer this question.Which of the following will be the result of the situation illustrated in the graph?
A)New firms will enter the industry and this will shift the market supply curve to the right.
B)New firms will enter the industry and this will shift the market supply curve to the left.
C)Some firms will exit from the industry and this will shift the market supply curve to the right.
D)Some firms will exit from the industry and this will shift the market supply curve to the left.
E)Long run equilibrium has been achieved and no new entry or exit of firms will occur.
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Related Questions
- Q21:Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry:
-Refer to the graph above to answer this question.Which of the following statements is correct?
A)This graph illustrates a short-run situation and the firm will soon be producing more.
B)This graph illustrates a short-run situation and the firm will soon be charging a higher price.
C)This graph illustrates a short-run situation and the firm will soon be producing less.
D)This graph illustrates a long-run situation the and firm will soon be producing more.
E)This graph illustrates a long-run situation and the and firm will soon be charging a higher price. - Q22:Below is a graphical illustration of a typical firm operating in a monopolistically competitive industry:
-Refer to the graph above to answer this question.Which of the following will be a result of the situation illustrated in the graph above?
A)The market demand curve will shift to the left.
B)The market demand curve will shift to the right.
C)The market supply curve will shift to the left.
D)The market supply curve will shift the right.
- Q23:The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry.
-Refer to the graph above to answer this question.Which of the following statements is correct?
A)This firm will charge price 0A and make no economic profits.
B)This firm will charge price 0A and make economic profits.
C)This firm will charge price 0B and make only normal profits.
D)This firm will charge price 0B and make economic profits.
- Q24:The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry.
-Refer to the graph above to answer this question.Which of the following statements is correct?
A)This firm is making economic profits of 0ADQ.
B)This firm is making economic profits of ABCD.
C)This firm is making a loss.
D)This firm is making no economic profits.
- Q25:The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry.
-Refer to the graph above to answer this question.Which of the following statements is correct?
A)This is a short-run situation and the firm is making economic profits.
B)This is a short-run situation and the firm is experiencing a loss.
C)This is a long-run situation and the firm is making economic profits.
D)This is a long-run situation but the firm is making no economic profits.
E)This is a long-run situation but no comment on profits is possible.
- Q27:The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry.
-What is the profit maximization criterion for a monopolistically competitive firm?
A)An output level that is equal to capacity output.
B)Price equals average cost.
C)Price equals marginal cost.
D)Marginal revenue equals average cost.
E)Marginal revenue equals marginal cost.
- Q28:The following graph shows the costs and revenues of a typical firm operating in a monopolistically competitive industry.
-What is true about the long-run equilibrium price of a monopolistically competitive firm?
A)It will equal average cost and exceed marginal cost.
B)It will equal both average cost and marginal cost.
C)It will equal marginal cost and exceed average cost.
D)It will exceed both average cost and marginal cost.
E)It will equal both marginal cost and marginal revenue.
- Q29:
-Refer to the graph above to answer this question.What is the firm's profit-maximizing price?
A)$30.
B)$38.
C)$40.
D)$55.
E)$72. - Q30:
-Refer to the graph above to answer this question.What is the firm's profit-maximizing output?
A)45.
B)90.
C)132.
D)145.
E)157.
- Q31:
-Refer to the graph above to answer this question.What is the firm's profit or loss at its optimum price and output?
A)A loss of $1,015.
B)A loss of $1,350.
C)$0.
D)A profit of $1,350.
E)A profit of $1,584.
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