Sixth Quiz - Econ 202 From the graph above, the amount of positive economic profits earned by this monopolist is illustrated by the area outlined by points P2CFP3. A market in which there are many firms each selling differentiated products is most likely a ________ market. monopolistically competitive When the government eliminates artificial barriers to entry: all of the above will occur. Which of the following conditions would prevent price discrimination? the inability to identify those customers willing to pay more The economic inefficiency of a monopolist can be measured by the deadweight loss. The firms with market power have a marginal revenue curve that is downward sloping and twice as steep as a linear demand. If short-run economic profits are greater than zero for firms in a monopolistically competitive market, in the long run we expect: competing firms to enter the market and sell similar products. A benefit to consumers of monopolistically competitive markets is that: consumers have a variety of products from which to choose. Oligopoly differs from monopoly and perfect competition in that: all of the above Cartels engage in price fixing in order to: increase profits. A dominant strategy is one that: is the best choice under all conditions. A Nash Equilibrium in a game is that outcome in which each player is doing the best he or she can given the other player's action. The threat of punishment in a repeated game tends to reduce the incentive to break a pricing agreement. Mutual interdependence of oligopolies means that each firm must consider the reactions of its rivals when it determines its price policies To be successful, collusion requires that oligopolists be able to block or restrict the entry of new producers Movie theaters often offer reduced rates for children under 10. This suggests that demand for adult admission is ________ than demand for children's admission. less elastic The firm may earn positive economic profits in the long-run if of high barriers to entry. What is its profit from senior customers under the senior discount policy of a $7 senior price and a $10 non-senior price? $1,500 What is its profit from non-senior customers under the senior discount policy of a $7 senior price and a $10 non-senior price? $2,560 In a Prisoners’ Dilemma, the pursuit of individual benefits leads to a sub-optimal joint outcome.