Question

1) Because the monopoly firm produces the entire output of the industry, average revenue and marginal revenue are ________ equal.

a) always

b) not

c) sometimes

d) none of the above

2) Monopolies charge a higher price than competitive firms (actually like imposing a private tax) and increase income for _________ of monopoly firms.

a) the competitors

b) the regulators

c) the owner’s

d) the customers

Answer 1

1. The correct answer is: b)

Reason: in case of monopoly, the average revenue is greater than the marginal revenue.

2. The correct answer is: c)

Reason: the higher price charged benefits the monopolist i.e. the owner of the monopoly firms

Thanks!