Question

The demand for a monopolist's product: O A. Is downward sloping.. B. Equals the market demand curve. C. Is equal to the firm's marginal revenue curve. D. All the statements are true. E. Answers (A) and (B) are true. QUESTION 32 In contrast to perfect competition, a monopolist charges a: A. Higher price and produces a larger quantity. B. Higher price and produces a smaller quantity. C. Lower price and produces a larger quantity. D. Lower price and produces a smaller quantity, QUESTION 33 A barrier to entry is: A. Always a man-made obstacle to the entry of new firms into a competitive industry OB. A term referring to the firm's private property and the firms' right to exclude people from entering this private property C. Something that effectively keeps new firms from entering an industry. D. Only relevant in perfectly competitive industries.

Answer 1

31) The demand curve for a Monopolist is a downward sloping curve and since he is the only seller in the market, he faces the market demand curve. Therefore demand curve is downward sloping market demand curve.

It is not equal to Marginal Revenue curve as the slope of the marginal Revenue curve is exactly half of the demand curve of a Monopolist.

Hence answers A) and B) are correct.

==> Option E) is correct.

32) In contrast to a perfect competition, a Monopolist charges a higher price and produces lower quantity. This is because in case of a perfect competition, P =MC amd in case of a monopoly, MC = MR. The two prices are different and price in case of perfect competition is lower.

==> Option B) is correct.

33) A barrier to entry is something that keeps new firms from entering the industry. These can be natural or man made. And can be found in Monopolies.

It is not a firm's right to exclude others to enter their property. It depends on market conditions.

Option C) is correct.