Question

PLZ HELP(3 problems)???? QUESTION 7 A monopolist can usually keep price equal to marginal revenue by lowering the price on the last unit sold only. is constrained in its pricing decisions by the demand curve it faces. faces a demand curve that is more elastic than the demand curve for the industry. can charge whatever price it wants because it is the only firm producing the good

10.Shortly after the turn of the century, U.S. Steel owned most of the iron ore reserves in the country. This is an example of monopoly due to governmental entry restrictions. a barrier to entry from scale economies. monopoly due to government restrictions. a barrier to entry from owning an important resource.

15. When comparing perfect competition and monopoly, a major assumption made is that the costs of production are the same under monopoly as under perfect competition. the monopolist can make an above normal rate of return. consumers only care about the price of the good and not whether the seller is a monopoly or not. the monopolist faces a downward sloping demand curve

Answer 1

7.

Correct option: . is constrained in its pricing decisions by the demand curve it faces.

Reason: Being the sole single seller in the market, it sets price where MR = MC using its demand curve, in order to maximize profits

8.

Correct option: a barrier to entry from owning an important resource.

Reason: Since US steel controls and owns the resource, it acts like a barrier to form natural monopoly

9.

Correct option: the monopolist can make an above normal rate of return

Reason: Being the sole seller with the purpose of profit maximization, a monopolist is able to make a above normal rate of return on profits than a perfectly competitive firm which makes 0 normal profits