Hrm 531 Week 6 Knowledge Check

Knowledge Check Week 6
The material presented below is not meant to be a comprehensive list of all you need to know in the content area. Rather it is a starting point for building your knowledge and skills. Additional study materials are recommended in each area below to help you master the material.
Personalized Study Guide Results:
Score: 5 / 6 Concepts | Mastery | Questions | Elasticity | 67% | * 1 * 2 * 3 | Relationship of Pricing Strategy to Market Structure | 100% | * 4 * 6 | Characteristics of Market Structures | 100% | * 5 |
Concept: Elasticity Mastery | 67% | Questions | * 1 * 2 * 3 |
Materials on the concept: * Interpretations of Ed * Absolute Value Equations and Inequalities * The
* Pure Competition * Neither Productive nor Allocative Efficiency * Monopolistic Competition and Oligopoly * Excess Capacity * Monopolistic Competition and Efficiency
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Top of Form
4 . Under perfect competition, a firm maximizes its profit by setting * A. P = MC because P = MR * B. P above MC where MC = MR * C. P = FC
Bottom of Form
Correct :
All firm sets MR = MC to maximize profit. Under perfect competition, MC = P; for example, the marginal cost pricing rule remains.

Materials * Profit Maximization in the Short Run: Marginal-Revenue–Marginal-Cost Approach * Figure 9.6 The P = MC rule and the competitive firm’s short-run supply curve.
A firm under monopolistic competition will earn * A. positive economic profit because it has some monopoly power * B. zero economic profit because it sets P = MC * C. zero economic profit because its P = ATC * D. positive economic profit because it sets MC = MR
Bottom of Form
Correct :
The correct answer is zero profit. You may have read monopolistic competition in the context of monopoly. The monopoly feature of monopolistic competition suggests that firms charge MC = MR, and in this case, P is above MC, so a zero profit as it sets P = MC is incorrect. The competition feature of monopolistic competition suggests that firms enter as long as there is positive profit. As more firms enter, each firm’s demand becomes increasingly flat—more elastic—until P = ATC and profit goes to zero.

Materials * Neither Productive nor Allocative Efficiency
Concept: Characteristics of Market Structures Mastery | 100% | Questions | * 5 |
Materials on the concept: * Demand as Seen by a Purely Competitive