Which of the following statements best describes a monopoly firm?

A. Price charged by monopoly is equal to marginal cost

B. Marginal cost is equated to marginal revenue to maximize profits

C. Firm is a price taker

D. Price charged is less then average variable cost

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Yusra AneesLv10

9 Nov 2020

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Related questions

1. A price-taking firmâs short-run supply curve is

a. the portion of its marginal cost curve above the average variable cost curve.

b. its average total cost curve.

c. its average variable cost curve.

d. its entire marginal cost curve. e. none of the above.

2. Which of the following is incorrect?

a. For a firm facing a downward-sloping demand curve, marginal revenue will be less than price.

b. In making output decisions, a firm should produce the output level for which marginal revenue equals marginal cost.

c. A price-taking firm will maximize profits by choosing that level of output for which price equals marginal cost.

d. The demand curve facing a price-taking firm is downward-sloping to the right.

32. Which of the following is not a difference between monopolies and perfectly competitive markets?

A. Monopolies face downward sloping demand curves while perfectly competitive firms face horizontal demand curves.

B. Monopolies charge a price higher than marginal cost while perfectly competitive firms charge a price equal to marginal cost.

C. Monopolies can earn profits in the long run while perfectly competitive firms break even.

D. Monopolies choose to produce the quantity at which marginal revenue equals marginal cost while perfectly competitive firms do not.

40. Which of the following statements is not correct?

A. Both monopolies and monopolistically competitive firms can earn economic profits in the long run.

B. Both monopolistically competitive and perfectly competitive firms can earn economic profits in the short run.

C. Only competitive firms produce the welfare-maximizing level of output.

D. Firms in perfect competition, monopolistic competition, and monopoly maximize profits by producing where marginal revenue equals marginal cost.

43. A monopolistically competitive firm is currently producing 20 units of output. At this level of output the firm is charging a price equal to $20, has marginal revenue equal to $12, has marginal cost equal to $12, and has average total cost equal to $18. From this information we can infer that

A. the profits of the firm are negative.

B. firms are likely to leave this market in the long run.

C. the firm is currently maximizing its profit.

D. All of the above are correct.

Both monopolistic competitive firms and perfectly competitive firms maximize profits:

A. by producing where marginal revenue is equal to marginal cost.

B. by producing where marginal revenue equals average revenue.

C. by producing where price equals average total cost.

D. by producing where price equals average variable cost.