[Solved] If We Assume That Price Leadership Prevails in a Particular

Table 11.2 -Refer to Table 11.2 to answer this question.What output will this firm produce? A)700. B)760. C)820. D)880.

Table 11.2 -Refer to Table 11.2 to answer this question.If the firm produces its profit-maximizing output,how much excess capacity will it have? A)60. B)120. C)300. D)More information is needed to answer the question.

Which of the following would measure excess capacity? A)The difference between what is being produced and the level of production that maximizes profits. B)The difference between what is being produced and economic capacity. C)The difference between what is being produced and the level of production that minimizes short-run marginal cost. D)The difference between the level of production that minimizes short-run average cost and that achieves economic capacity.

Which of the following statements is correct when comparing a monopoly market and an oligopoly market? A)The price and quantity would be the same in both markets. B)Both price and quantity would be lower in the monopoly market than in the oligopoly market. C)The price would be lower and the quantity would be higher in the monopoly market than in the oligopoly market. D)The price would be higher and the quantity would be lower in the monopoly market than in the oligopoly market.

All,except one,of the following statements about the kinked demand curve theory of oligopoly are correct.Which is the exception? A)It explains why the prices charged by rival firms are often similar. B)It explains why rival firms that charge similar prices may not be in collusion. C)It explains why the prices charged by rival firms sometimes go for months,or even years,without changing. D)It explains,particularly well,how the prevailing price in the industry first got established.

All of the following,except one,could be an explanation of a price war between firms.Which is the exception? A)A breakdown in the collusive agreement between firms. B)The intense competition that one finds in a perfectly competitive industry. C)An aggressive young firm challenging the established price leadership of a rival firm. D)The action taken by established firms to ward off the possible entry of a new firm.

All,except one,of the following statements are valid arguments in favour of advertising.Which one is the exception? A)Advertising provides consumers with information. B)Advertising reduces the search time needed by consumers to acquire products. C)Advertising increases the barriers to entry into an industry and thereby enhances competition. D)Advertising can lower the prices of products by reducing the firms' average cost through increased output levels. E)Advertising increases the availability of radio and television program choices for the consumer.

-Refer to Figure 11.10 to answer this question.What output level will the firm produce? A)Q₁. B)Q₂. C)Q₃. D)Q₄. E)More information is needed to answer this question.

-Refer to Figure 11.10 to answer this question.What price will the firm charge? A)P₁. B)P₂. C)P₃. D)P₄.

Which of the following statements is correct about oligopoly firms? A)They typically achieve economic capacity. B)They may or may not charge a price higher than marginal cost. C)They maximize profits by equating marginal revenue and marginal cost. D)They operate in an intensely competitive atmosphere in which the market dictates price. E)They produce an output that puts them graphically on the rising portion of the AC curve.