Econ 302 Comprehensive Exam
Elaborations with Verified Questions and
Detailed Answers 2026-2027 (GRADED
A+)
Which statement is true of the market supply curve? - Answer✔️One must know
the marginal cost information of firms in order to construct a supply function.
Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q.
Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q. How
many units of output will be produced by a firm operating in this market with a
MC = 130Q? - Answer✔️2
The demand curve facing a perfectly competitive firm is - Answer✔️infinitely
elastic.
Competitive markets result in allocative efficiency because they -
Answer✔️exhaust all possibilities for mutually beneficial trade.
A firm is currently selling its product at $20 each. It estimates that its average total
cost of production is $100 and its average fixed cost is $40. In the short run the
firm should - Answer✔️shutdown.
At market equilibrium, the total benefit that results from all the transactions is -
Answer✔️the sum of the producer surplus and the consumer surplus.
In the long run, a tax placed on a perfectly competitive industry should have what
effect on the entire market? - Answer✔️Decrease the total amount of the good
sold.
Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q.
Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q. What
is the industry supply curve? - Answer✔️P = 50 + 0.1Q
, The profit maximizing output level for a perfectly competitive firm is always
where - Answer✔️P = MC.
In the long run, equilibrium for a monopolist is when - Answer✔️None of these is
necessarily true.
Say a monopolist knew that at the current price for its product demand is inelastic.
If marginal costs for this firm are zero, then in order to maximize profits this
monopolist should - Answer✔️reduce output.
The demand equation for a single price monopolist is P = 120 - 3Q. The marginal
revenue curve for this monopolist is - Answer✔️120 - 6Q
According to the text, the most important of the five factors which give rise to
monopoly is - Answer✔️economies of scale.
Which of the following is not true?
A monopolist can set price at arbitrarily high levels.
Economies of scale are the cause of natural monopolies.
A monopolist typically seeks to maximize profits.
Monopolists price on the elastic portion of their demand curves. - Answer✔️A
monopolist can set price at arbitrarily high levels.
A single price profit maximizing monopolist is inefficient because - Answer✔️the
sum of consumer and producer surplus is less than it could be.
In the diagram below, the profit maximizing output level is - Answer✔️0A
A profit maximizing monopolist faces the following information: P = $4, MR = $2,
MC = $1.50. The firm should - Answer✔️increase output.
A profit maximizing monopolist faces the following information: P = $10, MR =
$5, ATC = $6, MC = $5. The firm should - Answer✔️stay at its current level of
output.
A single price monopoly that faces the demand curve P = 10 - Q and profit
maximizes by reducing price from $6 to $5 must have a marginal cost of -
Answer✔️1
Elaborations with Verified Questions and
Detailed Answers 2026-2027 (GRADED
A+)
Which statement is true of the market supply curve? - Answer✔️One must know
the marginal cost information of firms in order to construct a supply function.
Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q.
Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q. How
many units of output will be produced by a firm operating in this market with a
MC = 130Q? - Answer✔️2
The demand curve facing a perfectly competitive firm is - Answer✔️infinitely
elastic.
Competitive markets result in allocative efficiency because they -
Answer✔️exhaust all possibilities for mutually beneficial trade.
A firm is currently selling its product at $20 each. It estimates that its average total
cost of production is $100 and its average fixed cost is $40. In the short run the
firm should - Answer✔️shutdown.
At market equilibrium, the total benefit that results from all the transactions is -
Answer✔️the sum of the producer surplus and the consumer surplus.
In the long run, a tax placed on a perfectly competitive industry should have what
effect on the entire market? - Answer✔️Decrease the total amount of the good
sold.
Suppose an industry has 100 firms, each with supply curve P = 50 + 10Q.
Furthermore, suppose the market demand curve is given by P = 200 - 0.9Q. What
is the industry supply curve? - Answer✔️P = 50 + 0.1Q
, The profit maximizing output level for a perfectly competitive firm is always
where - Answer✔️P = MC.
In the long run, equilibrium for a monopolist is when - Answer✔️None of these is
necessarily true.
Say a monopolist knew that at the current price for its product demand is inelastic.
If marginal costs for this firm are zero, then in order to maximize profits this
monopolist should - Answer✔️reduce output.
The demand equation for a single price monopolist is P = 120 - 3Q. The marginal
revenue curve for this monopolist is - Answer✔️120 - 6Q
According to the text, the most important of the five factors which give rise to
monopoly is - Answer✔️economies of scale.
Which of the following is not true?
A monopolist can set price at arbitrarily high levels.
Economies of scale are the cause of natural monopolies.
A monopolist typically seeks to maximize profits.
Monopolists price on the elastic portion of their demand curves. - Answer✔️A
monopolist can set price at arbitrarily high levels.
A single price profit maximizing monopolist is inefficient because - Answer✔️the
sum of consumer and producer surplus is less than it could be.
In the diagram below, the profit maximizing output level is - Answer✔️0A
A profit maximizing monopolist faces the following information: P = $4, MR = $2,
MC = $1.50. The firm should - Answer✔️increase output.
A profit maximizing monopolist faces the following information: P = $10, MR =
$5, ATC = $6, MC = $5. The firm should - Answer✔️stay at its current level of
output.
A single price monopoly that faces the demand curve P = 10 - Q and profit
maximizes by reducing price from $6 to $5 must have a marginal cost of -
Answer✔️1
