Unit 4 check

Unit 4 check: Imperfect Competition

10 questions from 5 lessons in Unit 4. Answer each one, and if you miss, follow the link back to where it is taught, then try again. Your score counts first tries.

Question 1 · from 4.1 · Sort it

Each card describes a market. Tap a card, then tap the kind of imperfect competition it is.

Monopoly

Oligopoly

Monopolistic competition

Monopsony

Question 2 · from 4.2 · Calculate

A monopoly can sell 1 unit at $20, 2 units at $18 each, 3 at $16 each, 4 at $14 each or 5 at $12 each. Its marginal cost is $6 for every unit. What price maximizes its profit, in dollars?

Your answer dollars

Question 3 · from 4.3 · Calculate

A monopoly faces the demand curve P = 30 − Q and has a constant marginal cost of $6. If it practices perfect price discrimination, how many units does it sell?

Your answer units

Setup for question 4

Luma Café is one of many cafés in a city, each with its own drinks, and anyone may open a café. Entry and exit do not change any café's costs.

Luma Café today, at its profit-maximizing output
Measure	Value
Cups sold a day	300
Price per cup	$5.00
Average total cost at 300 cups	$4.20
Marginal cost at 300 cups	$3.10
Lowest possible ATC	$3.80, at 450 cups

Question 4 · from 4.4 · Calculate

What is Luma's economic profit today, in dollars a day?

Your answer dollars

Setup for question 5

Draw this game's payoff matrix on paper, with Ace on the rows, and mark each cell you sorted as a Nash equilibrium. Then check: does either chain have a dominant strategy?

Question 5 · from 4.5 · Sort it

Ace and Bolt are the only two coffee chains in a city, and each chooses to open a new store downtown or not. Payoffs in millions of dollars, Ace's first: both open, $2 and $1; only Ace opens, $5 and $3; only Bolt opens, $3 and $4; neither opens, $4 and $2. Tap each pair of choices, then tap whether it is a Nash equilibrium.

Nash equilibrium

Not a Nash equilibrium

Question 6 · from 4.1 · Calculate

A town's only bike shop can rent 4 bikes a day at $30 each, or 5 bikes a day at $27 each. What is the marginal revenue of the 5th bike, in dollars?

Your answer dollars

Question 7 · from 4.2 · Calculate

A monopoly sells 40 units at $30 each. Its marginal cost is a constant $10 a unit. Demand is a straight line, and at a price of $10 buyers would purchase 80 units. What is the deadweight loss of the monopoly's choice, in dollars?

Your answer dollars

Question 8 · from 4.3 · Sort it

Each card describes how a seller prices. Tap a card, then tap whether it is price discrimination.

Price discrimination

Not price discrimination

Uses the same setup as question 4, above.

Question 9 · from 4.4 · Multiple choice

What will most likely happen in this market in the long run?

Setup for question 10

Kestrel Air and Larkspur Air are the only airlines flying between two islands. Each chooses to hold its fares or cut them. The matrix shows weekly profits in thousands of dollars, Kestrel's first.

Weekly profits in thousands of dollars (Kestrel's first, then Larkspur's)
	Larkspur: Hold fares	Larkspur: Cut fares
Kestrel: Hold fares	$90, $70	$30, $100
Kestrel: Cut fares	$110, $40	$50, $60

Question 10 · from 4.5 · Multiple choice

What is the Nash equilibrium of this game?

0 of 10 answered.