1. One way the monopolist can test consumers for the highest price they are willing to...
1. One way the monopolist can test consumers for the highest price they are willing to pay is by which of the following?
-
Reveal preferences surveys.
-
Setting the highest price possible.
-
Forcing consumers to pay a higher price.
-
Keep the prices high as possible.
-
2. If a firm is surviving which of the following is correct?
Multiple Choice
-
It’s making revenues.
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It’s incurring a loss.
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It’s making a profit.
-
It’s not breaking even.
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3. The portion of the demand curve in monopoly where the firm lowers price but loses revenues is which of the following?
-
Ultra elastic.
-
Inelastic.
-
Elastic.
-
Un-inelastic.
Homework Answers
1.A monopolist can check the maximum price consumers are willing to pay by applying revealed preference method.
Answer-First option.
2.A firm is suriving means it is making profit.
Answer-Third option.
3.If the monopolist operates at the inelastic portion of the demand curve,then a fall in price reduces revenue.
Answer-Second option
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