question
A monopolist is said to have market power because _____
answer
it faces a downward-sloping demand curve.
question
A monopolist's demand curve is _____
answer
identical to its market demand curve.
question
A natural monopoly forms when _____
answer
the long-run average cost incurred by a firm declines as the firm expands output.
question
A profit-maximizing monopolist never produces along the _____
answer
inelastic portion of the demand curve, because marginal revenue is negative there.
question
A profit-maximizing monopolist that produces in the short run will _____
answer
increase output as long as the marginal revenue exceeds the marginal cost of producing that unit.
question
As a monopolist increases the quantity of output produced, _____
answer
both price and marginal revenue decrease, but marginal revenue falls faster than price.
question
For a monopolist, average revenue is _____
answer
more than marginal revenue at all output levels.
question
Gilligan runs the only dry-cleaning business on a desert isle. If the cost of cleaning fluid falls, he can increase profit by _____
answer
lowering his price.
question
Refer to Exhibit 9.1, which shows the long-run average cost of a firm. The downward-sloping long-run average cost curve indicates a monopoly characterized by which type of barrier to entry?
answer
economies of scale
question
Suppose the marginal revenue for a particular level of a monopolist's output is $40. This implies that _____
answer
total revenue is increasing for this output range.
question
Which of the following can be concluded about a monopolist whose marginal revenue is zero for a particular output level?
answer
Total revenue earned by the monopolist is at its maximum at that output level.
question
Which of the following describes a monopolized market structure?
answer
a single firm producing a highly differentiated product and serving the entire market
question
Which of the following does a monopoly control that a perfectly competitive firm does not control?
answer
price
question
Which of the following equations describes the relationship between market price (P), average revenue (AR), and marginal revenue (MR) for a non-discriminating monopolist?
answer
P = AR > MR
question
Which of the following is true of the marginal revenue earned by a non-price discriminating monopolist that charges a single price?
answer
The marginal revenue earned by a monopoly is less than the price of its product.
question
Which of these is likely to be true of perfect competition but not of monopoly?
answer
A firm can face competition from new entrants into the market in the long run.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
