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AP Microeconomics Unit 4 exam with correct answers
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AP Microeconomics Unit 4 exam with correct answers
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AP Microeconomics Unit 4 exam with correctanswers
5 nnCharacteristics nnof nna nnMonopoly nn- nncorrect nnanswer-1) nnSingle nnSeller
2) nnUnique nngood nnwith nnno nnclose nnsubstitute
3) nn"Price nnMaker"
4) nnHigh nnBarriers nnto nnEntry
5) nnSome nn"Nonprice" nnCompetition
Single nnSeller nn(1) nn- nncorrect nnanswer--one nnfirm nncontrols nnthe nnvast nnmajority nnof nna nnmarket
-firm=industry
"Price nnMaker" nn(3) nn- nncorrect nnanswer--firm nncan nnmanipulate nnprice nnby nnchanging nnthe nnquantity
nnproduced nn(ie. nnshifting nnsupply nnto nnthe nnleft)
High nnBarriers nnto nnEntry nn(4) nn- nncorrect nnanswer--new nnfirms nnCANNOT nnenter nnmarket
-no nnimmediate nncompetitors
-firms nncan nnmake nnprofit nnin nnthe nnlong-run
Some nn"Nonprice" nnCompetition nn(5) nn- nncorrect nnanswer--monopolies nnstill nnadvertise nntheir nnproducts nnin
nnan nneffort nnto nnincrease nndemand
Four nnOrigins nnof nnMonopolies nn(Barriers nnto nnEntry) nn- nncorrect nnanswer-1) nnGeography
2) nnGovernment
3) nnTechnology nnor nnCommon nnUse
4)Mass nnProduction nnand nnLow nnCosts
, Main nndifference nnbetween nnMonopolies nnand nnPerfect nnCompetition nn- nncorrect nnanswer-MARGINAL
nnREVENUE nnDOES nnNOT nnEQUAL nnPRICE nn(MR nnLESS nnTHAN nnPRICE)
-monopolies nn(and nnall nnimperfectly nncompetitive nnfirms) nnhave nndownward nnsloping nndemand nncurve
How nndoes nna nnfirm nnsell nnmore nnin nna nnmonopoly? nn- nncorrect nnanswer-A nnfirm nnmust nnlower nnits nnprice
Total nnRevenue nnTest nn- nncorrect nnanswer-If nnprice nnfalls nnand nnTR nnincreases, nnthen nndemand nnis nnelastic; nn
If nnprice nnfalls nnand nnTR nnfalls, nnthen nndemand nnis nninelastic
(A nnmonopoly nnwill nnonly nnproduce nnin nnthe nnelastic nnrange)
Where nndo nnmonopolists nnproduce? nn- nncorrect nnanswer-Where nnMR=MC, nnbut nnit nncharges nnthe nnprice
nnconsumers nnare nnwilling nnto nnpay nnidentified nnby nnthe nndemand nncurve
Are nnmonopolies nnefficient? nn- nncorrect nnanswer-No, nnmonopolies nnunder-produce nnand nnovercharge
What nnhappens nnto nnCS nnand nnPS nnfor nna nnmonopoly? nn- nncorrect nnanswer-CS nndecreases
PS nnincreases
Total nnSurplus nndecreases
There nnis nnnow nnDWL
Are nnmonopolies nnproductively nnefficient? nn- nncorrect nnanswer-No, nnthey nnare nnnot nnproducing nnat nnthe
nnlowest nncost nn(minimum nnATC). nnInstead, nnthey nnwill nnmaximize nnprofit nnby nnfinding nnMR=MC
Are nnmonopolies nnallocatively nnefficient? nn- nncorrect nnanswer-No, nnprice nnis nngreater nnand nnthe nnmonopoly
nnis nnunder nnproducing
Why nnare nnmonopolies nninefficient? nn- nncorrect nnanswer-1) nnCharge nna nnhigher nnprice
2) nnDon't nnproduce nnenough nn(Not nnallocatively nnefficient)
3) nnProduce nnat nnhigher nncosts nn(Not nnproductively nnefficient)
4) nnHave nnlittle nnincentive nnto nninnovate nn(little nnexternal nnpressure nnto nnbe nnefficient)
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