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Monopolistic Competition Problem Set, Exams of Microeconomics

Genesee Community CollegeMicroeconomics

ECO101 - Step 1: To view this assignment, click on Assignment: Problem Set—Monopolistic Competition and Oligopoly. Step 2: Follow the instructions in the assignment and submit your completed assignment into the LMS.

Typology: Exams

2021/2022

Available from 09/15/2022

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Monopolistic Competition Problem Set1
Use the following information to answer questions 1 through 5:
The graph below shows the demand curve and cost data for a firm operating in a monopolistic
competition.
1. Curve 2 shows:
a. Marginal Revenue
b. Marginal Costs
c. Demand Curve
1 This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4.0
International License. You can access an alternative means to plotting points at
https://www.desmos.com/calculator.
pf3
pf4
pf5

Partial preview of the text

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Monopolistic Competition Problem Set

1

Use the following information to answer questions 1 through 5:

The graph below shows the demand curve and cost data for a firm operating in a monopolistic competition.

  1. Curve 2 shows: a. Marginal Revenue b. Marginal Costs c. Demand Curve (^1) This assignment by Lumen Learning is licensed under a Creative Commons Attribution 4. International License. You can access an alternative means to plotting points at https://www.desmos.com/calculator.
  1. Curve 3 shows: a. Marginal Revenue b. Marginal Costs c. Demand Curve
  2. Curve 1 shows: a. Marginal Revenue b. Marginal Costs c. Demand Curve
  3. The profit maximizing quantity for this firm is: a. 10 b. 15 c. 5 d. 30
  4. What price will this firm set in order to maximize profits (or minimize losses)? a. 30 b. 35 c. 25 d. 10

Use the following information to answer questions 7 through 9:

The table below shows data for the production of Avocados for an individual firm operating in a monopolistic competition. Quantity of Avocados Price Total Costs 100 550 48500 200 500 93500 300 450 143500 400 400 198500 500 350 258500 600 300 323500

  1. At what quantity are marginal revenues equal to marginal costs? At quantity 200, both marginal revenue and marginal cost are equal at 450.
  2. What is the profit maximizing quantity? NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities! The profit maximizing quantity occurs when MR=MC. Therefore, the profit maximizing quantity is 200.
  3. What is the profit maximizing price? NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities! The profit maximizing price is 500, which is the price at which the profit maximizing quantity is 200.

Use the following information to answer questions 10 through 12:

Consider the following prisoner's dilemma with the payoff matrix (Numbers represents years in prison):

  1. What is the dominant strategy for player A? a. Remain silent. b. There is no dominant strategy. c. Confess.
  2. What is the dominant strategy for player B? a. Remain silent. b. There is no dominant strategy. c. Confess.
  3. What is the Nash Equilibrium (in pure strategy)? a. 25, 25 b. 40, 5 c. 10, 10 d. 5, 40 e. There is no Nash equilibrium.