ECON 1100 COMPLETE LATEST CH.10
BASED WITH QUESTIONS AND
ANSWERS
1)
One similarity between a monopoly and a firm in perfect competition is that both
A)
choose their output independent of demand.
B)
face the entire market demand curve.
C)
set their selling price.
D)
have market power.
E)
are profit maximizers. - ANSWER-E
The marginal revenue curve facing a single-price monopolist
A)
is the same as the demand curve facing the monopolist.
B)
lies below the average revenue curve.
C)
at first falls to a minimum and then rises as output is increased.
D)
is the same as the average revenue facing curve the monopolist.
E)
shows the change in the profit for the firm. - ANSWER-B
The demand curve facing a single-price monopolist slopes downward because
A)
it sells typically to only one consumer.
B)
its demand curve is the market demand curve, which is generally downward sloping.
C)
its supply curve is upward sloping.
D)
demand is perfectly inelastic.
E)
its average revenue equals its marginal revenue - ANSWER-B
A monopoly is distinguished from a firm operating under any other market structure in the
following way: the monopoly
A)
can choose its output level.
B)
faces a demand curve which is identical to the market demand curve.
C)
can choose its level of cost.
, D)
does not produce at a profit-maximizing level of output.
E)
charges a price higher than its average revenue - ANSWER-B
For a single-price monopolist, marginal revenue falls faster than price (as output rises) because
A)
the firm has no supply curve.
B)
the cost of producing extra units of output increases as production is increased.
C)
in order to sell additional units, the price must be lowered on all units.
D)
profits are maximized when marginal cost equals marginal revenue.
E)
none of the above--marginal revenue does not fall faster than price - ANSWER-C
Marginal revenue is less than price for a single-price monopolist because the
A)
firm's output decisions do not affect the selling price.
B)
monopolist must worry about how its price setting will lead to entry by other firms.
C)
monopolist charges a price higher than the unit production cost.
D)
firm must lower its price for all units if it wants to sell more of the product.
E)
monopolist has achieved economies of scale - ANSWER-D
For a single
-
price monopolist, the revenue
-
maximizing level of output occurs at a level of output
such that
A)
MR=0.
B)
MR=MC.
C)
MC=AR.
D)
MR=AC.
E)
MC=P - ANSWER-A
If a single-price monopolist sets price where the price elasticity of demand exactly equals 1, its
A)
total revenue is at its maximum.
B)
total profits are at a maximum.
C)
BASED WITH QUESTIONS AND
ANSWERS
1)
One similarity between a monopoly and a firm in perfect competition is that both
A)
choose their output independent of demand.
B)
face the entire market demand curve.
C)
set their selling price.
D)
have market power.
E)
are profit maximizers. - ANSWER-E
The marginal revenue curve facing a single-price monopolist
A)
is the same as the demand curve facing the monopolist.
B)
lies below the average revenue curve.
C)
at first falls to a minimum and then rises as output is increased.
D)
is the same as the average revenue facing curve the monopolist.
E)
shows the change in the profit for the firm. - ANSWER-B
The demand curve facing a single-price monopolist slopes downward because
A)
it sells typically to only one consumer.
B)
its demand curve is the market demand curve, which is generally downward sloping.
C)
its supply curve is upward sloping.
D)
demand is perfectly inelastic.
E)
its average revenue equals its marginal revenue - ANSWER-B
A monopoly is distinguished from a firm operating under any other market structure in the
following way: the monopoly
A)
can choose its output level.
B)
faces a demand curve which is identical to the market demand curve.
C)
can choose its level of cost.
, D)
does not produce at a profit-maximizing level of output.
E)
charges a price higher than its average revenue - ANSWER-B
For a single-price monopolist, marginal revenue falls faster than price (as output rises) because
A)
the firm has no supply curve.
B)
the cost of producing extra units of output increases as production is increased.
C)
in order to sell additional units, the price must be lowered on all units.
D)
profits are maximized when marginal cost equals marginal revenue.
E)
none of the above--marginal revenue does not fall faster than price - ANSWER-C
Marginal revenue is less than price for a single-price monopolist because the
A)
firm's output decisions do not affect the selling price.
B)
monopolist must worry about how its price setting will lead to entry by other firms.
C)
monopolist charges a price higher than the unit production cost.
D)
firm must lower its price for all units if it wants to sell more of the product.
E)
monopolist has achieved economies of scale - ANSWER-D
For a single
-
price monopolist, the revenue
-
maximizing level of output occurs at a level of output
such that
A)
MR=0.
B)
MR=MC.
C)
MC=AR.
D)
MR=AC.
E)
MC=P - ANSWER-A
If a single-price monopolist sets price where the price elasticity of demand exactly equals 1, its
A)
total revenue is at its maximum.
B)
total profits are at a maximum.
C)
