In 2010 , the pizza market in Charleston, Illinois, was perfectly competitive. But almo

   In 2010 , the pizza market in Charleston, Illinois, was perfectly competitive. But almost
                            overnight, one firm bought up all its competitors to become the monopoly in the
                            Charleston pizza market. As a result,

a.less pizza was produced and price increased

b.more pizza was produced and price increased

c.less pizza was produced and price decreased

d.more pizza was produced and price decreased

e.quantity and price remained the same but profit increased

102.              How can a perfectly competitive firm that makes (along with its competitors) zero
                            economic profit create positive economic profit in the short run? It can

a.raise the price of its good

b.develop a new cost-saving technology

c.advertise to promote its own brand

d.set up barriers to entry

e.lower the price to increase the quantity it can sell

103.              When price falls in a perfectly competitive industry, each firm will

a.sell more output

b.sell the same amount of output but earn less economic profit

c.sell less output

d.raise its price

e.shut down production until price regains its former level

104.              In perfect competition, innovation is a means for a firm to

a.exit the market

b.establish brand loyalty

c.shift the ATC and MC curves upward

d.generate short-run economic profit

e.shift the market supply to the left

105.              When an innovation is created by one firm in a perfectly competitive market,

a.the market price will rise

b.less output will be produced by its competitors

c.the long-run equilibrium price remains the same but the economic profit of its
competitors falls

d.some firms leave because the price will fall

e.other firms will imitate the innovator

106.              Economies of scale means

a.average total cost rises as firm size and output increase

b.average total cost falls as firm size and output increase

c.small firms have a cost advantage over large firms

d.monopolistically competitive firms charge less than a monopoly

e.a monopoly makes more economic profit than a perfectly competitive firm

107.              Schumpeter hypothesized that monopolies

a.do not maximize profits

b.advertise extensively to keep out new entrants

c.may charge a lower price than the price generated in a perfectly competitive market

d.usually experience constant returns to scale

e.have higher costs than smaller firms

108.              Schumpeter believes that monopolies use their economic profit to

a.control prices

b.advertise in order to create brand loyalties

c.block the entry of new firms

d.pay high salaries to its executives

e.develop new technologies, which often leads to lower ATC curves and lower prices

109.              According to your text, nineteenth century economist Alfred Marshall believed that
                            technical progress is best accomplished by

a.firms of considerable size that have the resources to engage in research and
development

b.universities where basic research is initiated

c.curtailing competition so that firms will not lose money by experimenting in research
and development

d.the superior inventive force of a multitude of small competitive firms

e.the government subsidizing research and development

110.              The firm’s demand curve in monopolistic competition slopes downward because

a.there are strong barriers to entry in the industry

b.of product differentiation among the goods firms produce

c.only few firms exist in the industry

d.the market demand curve is downward sloping

e.the market demand curve is horizontal