Lecture 5

In a ___________ market, the average revenue is equal to marginal revenue.

• perfect competition

• monopolistic competition

• oligopoly

• monopoly

Firms in a _________ market are price takers.

• perfect competition

• monopolistic competition

• oligopoly

• monopoly

In imperfect competition market, the marginal revenue is ________ than average revenue and the curves are _________ sloping.

• lower, upward

• lower, downward

• higher, upward

• higher, downward

Firms in both perfect and imperfect markets maximize their profit when ________.

• MR>MC

• MC>MR

• MR=MC

Which of the following is an example of products sold or services provided in a monopolistic competition market?

• fisheries

• electricity supply

• branded shoes

• airlines services

Demand in a monopoly market is _________ than in a monopolistic market because there is __________.

• elastic, no substitute

• inelastic, no substitute

• elastic, substitute

• inelastic, substitute

Firms in a monopolistic competition market sell __________ products.

• identical

• homogeneous

• differentiated

• unique

Subnormal profit is when

• TR > TC

• TC > TR

• TR = TC

Based on the diagram, does the firm earn economic profit or loss? How much is the profit?

• profit, RM 2500

• profit, RM 1300

• loss, RM 2500

• loss, RM 1300

Based on the diagram, the firm earns __________ profit.

• supernormal

• normal

• subnormal