SOLVED

11) Some of the advantages Netflix had over companies like Blockbuster and Wal-Mart in successfully competing in the mail order DVD rental business include all of the following except A) a quick turnaround of mailing out the customer’s next DVD once the previous one was returned. B) an extensive system of storefront operations where customers could rent DVDs in person. C) an efficient system of processing DVDs returned from customers. D) a national system of warehouses allowing for quick customer delivery. 12) As customers switch from renting DVDs to downloading or streaming movies from the Internet, Netflix will likely find it ________ to remain profitable as they face ________ competition with streaming movies than with mail order DVD rental. A) harder; more B) harder; less C) easier; more D) easier; less 13) Refer to Figure 11-11. What is the productively efficient output for the firm represented in the diagram? A) Qf units B) Qg units C) Qh units D) Qj units 14) Refer to Figure 11-11. What is the allocatively efficient output for the firm represented in the diagram? A) Qf units B) Qg units C) Qh units D) Qj units 15) Refer to Figure 11-11. What is the amount of excess capacity? A) Qh – Qf units B) Qj – Qf units C) Qj – Qh units D) Qh – Qg units 16) Refer to Figure 11-11. Suppose the firm is currently producing Qf units. What happens if it increases its output to Qg units? A) Its average cost of production will fall and its profit will rise. B) It will be taking advantage of economies of scale and will be able to lower the price of its product. C) It will move from a zero profit situation to a profit situation D) It will move from a zero profit situation to a loss situation 17) Refer to Figure 11-11. In the long run, why will the firm produce Qf units and not Qg units, which has a lower its average cost of production? A) Although its average cost of production is lower when the firm produces Qg units, to be able to sell its output the firm will have to charge a price below average cost, resulting in a loss. B) At Qg, average cost exceeds marginal cost so the firm will actually make a loss. C) At Qg, marginal revenue is less than average revenue which will result in a loss for the firm. D) The firm’s goal is to charge a high price and make a small profit rather than a low price and no profit.