ECON 411 Chapter 8 Practice #2 Exam
Questions and Answers Graded A+
*A monopolistic firm*
A) will never sell a product whose demand is inelastic at the quantity sold.
B) can sell as much as it wants for any price it determines in the market.
C) cannot determine the price, which is determined by consumer demand.
D) cannot sell additional quantity unless it raises the price on each unit
E) will always earn a profit in the long run. - Correct answer-A) will never sell a
product whose demand is inelastic at the quantity sold.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,An imperfectly competitive firm has the following total cost curve:
C = 100 + 4Q.
*What is average total cost equal to when Q = 10?* - Correct answer-C/Q = [100 +
(4)(10)]/10
= *14*
An imperfectly competitive firm has the following total cost curve:
C = 100 + 4Q.
*What is average fixed cost equal to when Q = 10?* - Correct answer-F/Q =
100/10 = *10*
*Under oligopoly, firms' pricing policies are ________ and, under monopolistic
competition, they are ________.*
A) interdependent; independent
B) independent; interdependent
C) cooperative; uncooperative
D) uncooperative; cooperative
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, E) profit maximizing; revenue maximizing - Correct answer-A) interdependent;
independent
*Monopolistic competition is associated with*
A) high-profit margins in the long run.
B) price-taking behavior.
C) explicit consideration at the firm level of the strategic impact of other firms'
pricing decisions.
D) product differentiation.
E) increasing returns to scale. - Correct answer-D) product differentiation.
*Modeling trade in imperfectly competitive industries is problematic because*
A) it is difficult to find an imperfectly competitive firm in the real world.
B) there are no models of imperfectly competitive behavior.
C) there is no single generally accepted model of behavior by imperfectly
competitive firms.
D) collusion among imperfectly competitive firms makes usable data rare.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
Questions and Answers Graded A+
*A monopolistic firm*
A) will never sell a product whose demand is inelastic at the quantity sold.
B) can sell as much as it wants for any price it determines in the market.
C) cannot determine the price, which is determined by consumer demand.
D) cannot sell additional quantity unless it raises the price on each unit
E) will always earn a profit in the long run. - Correct answer-A) will never sell a
product whose demand is inelastic at the quantity sold.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,An imperfectly competitive firm has the following total cost curve:
C = 100 + 4Q.
*What is average total cost equal to when Q = 10?* - Correct answer-C/Q = [100 +
(4)(10)]/10
= *14*
An imperfectly competitive firm has the following total cost curve:
C = 100 + 4Q.
*What is average fixed cost equal to when Q = 10?* - Correct answer-F/Q =
100/10 = *10*
*Under oligopoly, firms' pricing policies are ________ and, under monopolistic
competition, they are ________.*
A) interdependent; independent
B) independent; interdependent
C) cooperative; uncooperative
D) uncooperative; cooperative
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, E) profit maximizing; revenue maximizing - Correct answer-A) interdependent;
independent
*Monopolistic competition is associated with*
A) high-profit margins in the long run.
B) price-taking behavior.
C) explicit consideration at the firm level of the strategic impact of other firms'
pricing decisions.
D) product differentiation.
E) increasing returns to scale. - Correct answer-D) product differentiation.
*Modeling trade in imperfectly competitive industries is problematic because*
A) it is difficult to find an imperfectly competitive firm in the real world.
B) there are no models of imperfectly competitive behavior.
C) there is no single generally accepted model of behavior by imperfectly
competitive firms.
D) collusion among imperfectly competitive firms makes usable data rare.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
