When compared to firms in perfect competition, monopolists tend to charge __________ prices and offer __________ quantities of output.
a. lower; lower
b. higher; lower
c. lower; higher
d. higher; higher
e. higher; the same
QUESTION 2The Clayton Act of 1914
a. was too vaguely worded to reduce anticompetitive behavior significantly
b. prohibited conspiracies in restraint of trade
c. prohibited price discrimination that reduces competition and cannot be justified based on cost differences
d. created the Federal Trade Commission
e. prohibited firms from reducing prices too far
QUESTION 3The entry of new firms into a competitive industry in the long run has the effect of
a. driving up long-run equilibrium price
b. eliminating economic profits
c. reducing equilibrium quantity
d. making the demand curve facing each firm more inelastic
e. shifting the cost curves for each firm by an amount equal to total cost divided by the number of firms
QUESTION 4An important difference between a perfectly competitive firm and a monopolist is that
a. the perfectly competitive firm tends to be larger
b. only the monopolist attempts to maximize profit
c. only the perfectly competitive firm maximizes profit
d. the perfectly competitive firm faces a horizontal demand curve and the monopolist faces a downward-sloping demand curve
e. only the monopolist maximizes profit at the quantity where marginal cost equals marginal revenue
QUESTION 5Which of the following practices is not prohibited by the Clayton Act?
a. merger through the acquisition of assets, which substantially lessens competition
b. price discrimination that substantially lessens competition
c. tying contracts that substantially lessen competition
d. exclusive dealing that substantially lessens competition
e. interlocking directorates that substantially lessen competition
QUESTION 6If two perfectly competitive firms produce the same quantity at the market price, then, at that quantity, they must have the same
a. marginal cost and average total cost
b. marginal cost and average fixed cost
c. average total cost and average fixed cost
d. average fixed cost and average variable cost
e. marginal cost
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