4 Written questions
2 Matching questions
- Which of the following is characteristic of a pure monopolist's demand curve?
A) Average revenue is less than price.
B) Its elasticity coefficient is 1 at all levels of output.
C) Price and marginal revenue are equal at all levels of output.
D) It is the same as the market demand curve.
- Pure monopolists may obtain economic profits in the long run because:
A) of advertising. C) of barriers to entry.
B) marginal revenue is constant as sales increase. D) of rising average fixed costs.
- a c
- b d
5 Multiple choice questions
5 True/False questions
. For an imperfectly competitive firm:
A) total revenue is a straight, upsloping line because a firm's sales are independent of product price.
B) the marginal revenue curve lies above the demand curve because any reduction in price applies to all
C) the marginal revenue curve lies below the demand curve because any reduction in price applies to all
D) the marginal revenue curve lies below the demand curve because any reduction in price applies only to
the extra unit sold. → d
A pure monopolist's demand curve is:
A) downsloping. B) upsloping. C) parallel to the vertical axis. D) parallel to the horizontal axis. → d
A pure monopolist:
A) will realize an economic profit if price exceeds ATC at the equilibrium output.
B) will realize an economic profit if ATC exceeds MR at the equilibrium output.
C) will realize an economic loss if MC intersects the downsloping portion of MR.
D) always realizes an economic profit. → d
A purely monopolistic industry:
A) has no entry barriers.
B) has a downward sloping demand curve.
C) produces a product or service for which there are many close substitutes.
D) earns only a normal profit in the long run → a
A natural monopoly occurs when:
A) long-run average costs decline continuously through the range of demand.
B) a firm owns or controls some resource essential to production.
C) long-run average costs rise continuously as output is increased.
D) economies of scale are obtained at relatively low levels of output → c