Question

Question 1

For a monopolist?

Select one:

a. all of the above are true.

b. existing economic profits can be sustained over time.

c. its demand curve is downward sloping.

d. its marginal revenue is less than price.

Question 2.

For a natural monopoly, which of the following is false?

Select one:

a. It is more efficient to have a single firm produce the good.

b. One large firm can produce at lower cost than two or more smaller firms.

c. It would typically result from a firm's possession of an exclusive patent.

d. Production of the good must involve economies of scale throughout the relevant output range.

Question text 3.

If a perfectly competitive firm finds that price is greater than AVCbut less than ATC at the quantity where its marginal cost equals the market price?

Select one:

a. the firm will immediately shut down.

b. the firm will produce in the short run, and new entrants will tend to enter the industry over time.

c. the firm will be earning economic profits.

d. both b and d are true.

e. the firm will produce in the short run but may eventually go out of business.

Question text 4.

If a perfectly competitive firm's marginal revenue exceeded its marginal cost?

Select one:

a. it would cut its price in order to sell more output and increase its profits.

b. both a and c are true.

c. it is currently earning economic profits.

d. it would expand its output but not cut its price in order to increase its profits.

e. both b and c are true.

Answer 1

1) A

All of the above are true

For a monopolist, The demand curve will shift downward and causes downwards slopping due to increase in output by monopolist.

The monopolist MR will be less than price and also they keep their profit consistent over time.