KIIT University 2008 micro-economics - exam paper

perfectly inelastic.
B)

perfectly elastic.
C)

more elastic than that for a monopolist, but less elastic than that for a perfectly competitive firm.
D)

the identical elasticity as that for a perfectly competitive firm.
E)

less elastic than that for a monopolist, but more elastic than that for a perfectly competitive firm.

9)

Which of the subsequent is true?

9)

_______
A)

Monopolistically competitive firms produce less output than if they produced where long-run avg. costs were minimized.
B)

In the long run, monopolistically competitive firms produce at the point where long-run avg. costs are minimized.
C)

Because perfectly competitive firms have a few market power, the combination of free entry/exit and marginal-cost pricing does not lead to the least possible costs per unit in the long run.
D)

Monopolistically competitive firms charge the identical prices as perfectly competitive firms would in the long run.
E)

Price equals marginal cost in the long run for monopolistically competitive firms.


Use the figure for the question(s) beneath.



10)

Suppose the cost and revenue curves in the figure above represent the situation of a monopolistically competitive firm operating in the short run. Currently, this firm is

10)

______
A)

earning economic profits.
B)

operating at a loss.
C)

earning only a normal profit.
D)

breaking even.
E)

shut down.

11)

The perfectly competitive output and socially efficient price for the market graphed above is

11)

______
A)

Z and A.
B)

D and X.
C)

E and T.
D)

B and Y.
E)

B and S.

12)

The profit maximizing output and price for the monopolistically competitive firm defined by the figure above is

12)

______
A)

Z and A.
B)

B and Y.
C)

E and T.
D)

B and S.
E)

D and X.

13)

Which of the subsequent is an example of collusion?

Earning:   Approval pending.