Exam (elaborations)
ECS2601 ASSESSMENT 5 SEMESTER 2 2024
- Institution
- University Of South Africa (Unisa)
ECS2601 ASSESSMENT 5 SEMESTER 2 2024
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BMZ ACADEMYTHE BMZ ACADEMY
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BMZ ACADEMY 061 262 1185/068 053 8213
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Question text
Which of the following models results in the highest level of output assuming a fixed
number of firms with identical costs and a given demand curve?
a.Monopoly
b.Cournot
c.Stackelberg
d.Cartel
Clear my choice
Question text
Consider the following functions faced by a monopolist:
Demand: P=20-2Q
MR=20-4Q
MC=5+Q
At which level of output is profit being maximised?
a.5
b.2
c.10
d.3
Question text
Assume the marginal cost of a firm to produce headphones is R50. If the consumer is willing
to pay R80 for the headphones, this means the reservation price of the consumer is
a.130
b.30
c.80
d.50
Clear my choice
Question text
A firm faces the following average revenue (demand) curve:
P = 120 – 0.02Q
where Q is weekly production and P is price, measured in cents per unit. The firm’s
cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits.
What is the level of Profit?
a. 8 750 cents per week.
b. 25 000 cents per week.
c. 20 000 cents per week.
d.377 800 cents per week.
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Question text
Which of the following is correct regarding a firm operating in an oligopolistic market?
a.The firm has imperfect information.
b.The firm demand is the same as its average revenue.
c.The firm is a utility minimiser.
d.A cartel is generally illegal.
Clear my choice
Question text
Given the previous unit sold, the monopolist earns less revenue from that unit due to a
reduced price.
Select one:
True
False
Question text
Which condition/s can give rise to a monopoly power?
a.Positive externalities.
b.All of the options are correct
c.Brand dominance.
d.Cost advantages
Clear my choice
Question text
An cement making monopolist with a marginal cost curve of MC=Q was originally faced
with a demand curve:
P=20-2Q.
However, due to an increase in demand for housing, demand shifted to:
P=35-2Q.
Calculate the change in price and quantity due to this shift in demand.
a.An increase in P = 9, and increase in Q = 3.
b.An increase in P = 21, and increase in Q = 7
c.An increase in P = 12, and increase in Q = 4.
d.Impossible to determine with the given information.
Question text
Average revenue per quanity, is also equal to price times quantity.
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Select one:
True
False
Question text
An increase in marginal cost will always push the price up and cause the quantity supplied
by a monopolist to be less than the quantity supplied before the increase in marginal cost.
Select one:
True
False
Question text
When a firm practices perfect, first-degree price discrimination, then the profit maximising
output is where MC curve intersect the demand curve.
Select one:
True
False
Question text
A firm faces the following average revenue (demand) curve:
P = 120 – 0.02Q
where Q is weekly production and P is price, measured in cents per unit. The firm’s
cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits.
What is the level of Price?
a. R1.20
b. R105
c. R0.90
d. R60
Question text
In a Cournot duopoly model, one characteristic of the equilibrium position is that …
a.both firms produce the same amount of output.
b.output is less that the single-price monopoly output would be if only one firm were in the
market.
c.one firm drives the other out of the market.
d.output is the same as would exist in a competitive market.
Clear my choice
BMZ ACADEMY 061 262 1185/068 053 8213Page 4 of 20
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