AP MICROECONOMICS UNIT 4 FINAL
STUDY GUIDE 2026 COMPLETE SOLVED
QUESTIONS 100% CORRECT
◉Single Seller (1). Answer: -one firm controls the vast majority of a
market
-firm=industry
◉"Price Maker" (3). Answer: -firm can manipulate price by changing
the quantity produced (ie. shifting supply to the left)
◉High Barriers to Entry (4). Answer: -new firms CANNOT enter
market
-no immediate competitors
-firms can make profit in the long-run
◉Some "Nonprice" Competition (5). Answer: -monopolies still
advertise their products in an effort to increase demand
◉Four Origins of Monopolies (Barriers to Entry). Answer: 1)
Geography
, 2) Government
3) Technology or Common Use
4)Mass Production and Low Costs
◉Main difference between Monopolies and Perfect Competition.
Answer: MARGINAL REVENUE DOES NOT EQUAL PRICE (MR LESS
THAN PRICE)
-monopolies (and all imperfectly competitive firms) have downward
sloping demand curve
◉How does a firm sell more in a monopoly?. Answer: A firm must
lower its price
◉Total Revenue Test. Answer: If price falls and TR increases, then
demand is elastic;
If price falls and TR falls, then demand is inelastic
(A monopoly will only produce in the elastic range)
◉Where do monopolists produce?. Answer: Where MR=MC, but it
charges the price consumers are willing to pay identified by the
demand curve
◉Are monopolies efficient?. Answer: No, monopolies under-produce
and overcharge
STUDY GUIDE 2026 COMPLETE SOLVED
QUESTIONS 100% CORRECT
◉Single Seller (1). Answer: -one firm controls the vast majority of a
market
-firm=industry
◉"Price Maker" (3). Answer: -firm can manipulate price by changing
the quantity produced (ie. shifting supply to the left)
◉High Barriers to Entry (4). Answer: -new firms CANNOT enter
market
-no immediate competitors
-firms can make profit in the long-run
◉Some "Nonprice" Competition (5). Answer: -monopolies still
advertise their products in an effort to increase demand
◉Four Origins of Monopolies (Barriers to Entry). Answer: 1)
Geography
, 2) Government
3) Technology or Common Use
4)Mass Production and Low Costs
◉Main difference between Monopolies and Perfect Competition.
Answer: MARGINAL REVENUE DOES NOT EQUAL PRICE (MR LESS
THAN PRICE)
-monopolies (and all imperfectly competitive firms) have downward
sloping demand curve
◉How does a firm sell more in a monopoly?. Answer: A firm must
lower its price
◉Total Revenue Test. Answer: If price falls and TR increases, then
demand is elastic;
If price falls and TR falls, then demand is inelastic
(A monopoly will only produce in the elastic range)
◉Where do monopolists produce?. Answer: Where MR=MC, but it
charges the price consumers are willing to pay identified by the
demand curve
◉Are monopolies efficient?. Answer: No, monopolies under-produce
and overcharge
