ECON 705 Mod 6 Self-Assessment (GRADED A+) Questions and Answers 100 out 100.

ECON 705 Mod 6 Self-Assessment (GRADED A+) Questions and Answers 100 out 100. Mod. 6 Self-Assessment 1. The ability of a firm to raise its price while still maintaining a certain amount of sales means that the firm Select one: a. produces a complementary good. b. faces perfectly elastic demand for its product. c. produces a perfect substitute for the other products in the industry. d. has market power. 2. All of the following could be a barrier to entry except Select one: a. large economies of scale. b. occupational licenses (e.g., teacher certification, lawyers passing the bar exam, etc.). c. government-granted monopoly rights, as exists for many utility companies in cities. d. low fixed costs. 3. A firm with market power has a demand curve that slopes downward; this implies that Select one: a. price is less than marginal revenue. b. the selling price of the current unit must be set equal to the selling price of the previous unit sold. c. it must continually lower price on successive units in order to continue selling. d. marginal revenue is greater than marginal cost. 4. Firms with market power determine the optimal price and quantity by Select one: a. setting the price equal to the market price, and then equating that price with MCMC to find quantity. b. setting quantity at the point of minimum average total cost (ATCATC), and setting price equal to that ATCATC times the concentration ratio. c. adding the average fixed cost to the average total cost to find price, and producing the quantity that yields that price on the firm's demand curve. d. equating MRMR with MCMC to find quantity, then setting the price that yields that quantity on the firm demand curve. 5. A monopoly is producing a level of output at which price is $320, marginal revenue is $290, average total cost is $300, marginal cost is $290. The firm's current choice of output is Select one: a. too high. b. at the optimal level. c. too low. d. More information is needed to answer this question. 6. A monopoly is producing a level of output at which price is $320, marginal revenue is $290, average total cost is $330, marginal cost is $290, and average fixed cost is $25. In the short run, this firm should choose to Select one: a. shut down. b. produce, because it would earn $30 profit per unit. c. produce but take a loss of $10 per unit (better than shutting down). d. produce and break even (zero profit).