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11. In which market structure will a firm choose to stay in business (i.e. not shut down) when P

11. In which market structure will a firm choose to stay in business (i.e. not shut down) when P

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter8: Perfect Competition
Section: Chapter Questions
Problem 21RQ: Should a firm shut down immediately if it is making losses?
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11. In which market structure will a firm choose to stay in business (i.e. not shut down) when P<AVC at the output level where MR-MC? a) perfect competition b) monopoly c) monopolistic competition d) none of the above. All firms will shut down if P<AVC at the output where MR-MC. 12. A concentration ratio measures a) the average size of the firms in an industry b) the sales of the three largest firms in the industry minus the costs of these three largest firms. c) the excess capacity found in a particular oligopolistic industry. d) the share of total industry output accounted for by the largest firms in the industry. MC, MC, B MC, D, MR Demand F G Quantity (units) 13. In the above graph of non-collusive oligopoly, if the Marginal Cost curve shifts from MC1 to MC3, there will be: a) No change in price or output. b) A decrease in price and no change in output. c) A decrease in price and an increase in output. d) No change in price and an increase in output. Price or Cost (per unit)
Transcribed Image Text:11. In which market structure will a firm choose to stay in business (i.e. not shut down) when P<AVC at the output level where MR-MC? a) perfect competition b) monopoly c) monopolistic competition d) none of the above. All firms will shut down if P<AVC at the output where MR-MC. 12. A concentration ratio measures a) the average size of the firms in an industry b) the sales of the three largest firms in the industry minus the costs of these three largest firms. c) the excess capacity found in a particular oligopolistic industry. d) the share of total industry output accounted for by the largest firms in the industry. MC, MC, B MC, D, MR Demand F G Quantity (units) 13. In the above graph of non-collusive oligopoly, if the Marginal Cost curve shifts from MC1 to MC3, there will be: a) No change in price or output. b) A decrease in price and no change in output. c) A decrease in price and an increase in output. d) No change in price and an increase in output. Price or Cost (per unit)
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