Question

Hello, I'm asking for some help on these questions. Any help will be much appreciated. Thank you!

1. A monopolist faces ________.

A. a horizontal demand curve at the market price

B. several close substitutes for its product or service

C. a vertical demand curve

D. the market demand curve

2. Marginal revenue is less than the price for a monopolist because ________.

A. the firm sets the price

B. a monopolist must lower its price to sell another unit of output

C. there are no close substitutes for the firm's product

D. None of these

3. A profit-maximizing monopolist produces the quantity at which ________.

A.. Price = Marginal cost

B. Price = Marginal revenue

C. Marginal revenue = Marginal cost

D. Price = Average total cost

4. Which of the following is the best definition of an externality?

A. When a worker takes a job "off the books" to avoid paying taxes

B. When government intervention in a market reduces consumer surplus

C. When an economic activity imposes spillover costs or benefits on a third party

D. When firms sell products at a price greater than marginal cost

5. When the production of a good generates negative externalities, ________.

A. the private cost of production exceeds the social cost of production

B. the fixed cost of production is zero

C. the variable cost of production is zero

D. the social cost of production exceeds the private cost of production

6. In a market, social surplus is maximized when consumers' willingness to pay for a good equals the ________.

A. opportunity cost of producing the good

B. average variable cost of producing the good

C. marginal private cost of producing the good

D. marginal social cost of producing the good

Answer 1

Ans1) the correct option is D. the market demand curve

Ans2) the correct option is b) a monopolist must lower its price to sell another unit of output

Ans3) the correct option is C. Marginal revenue = Marginal cost

Ans4) the correct option is C. When an economic activity imposes spillover costs or benefits on a third party