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26 Nov 2019

Which of the following is true?
(A) A monopolist produces on the inelastic portion of its demand.
(B) A monopolist always earns an economic pro t.
(C) The more inelastic the demand, the closer marginal revenue is to price.
(D) In the short run, a monopoly will shut down if P < AV C.

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Casey Durgan
Casey DurganLv2
21 Mar 2019
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Related questions

1. Which of the following is true under a monopoly?

  • A. Monopolist chooses the highest possible price.
  • B. Monopolist chooses a price that is always higher than marginal cost of production.
  • C. Marginal revenue of a monopolist is price.
  • D. None of the above are true for monopoly.

2. You are the manager of a monopoly that faces a demand curve described by P = 230 -20Q. Your costs are C = 5 +30Q. The profit-maximizing output for your firm is:

  • A. 4
  • B. 5
  • C. 6
  • D. 7

3. Which of the following is true?

  • A. A monopolist produces on the inelastic portion of its demand.
  • B. A monopolist always earns an economic profit.
  • C. The more inelastic the demand, the closer marginal revenue is to price.
  • D. In the short run a monopoly will shutdown if P < AVC.

4. In a competitive industry with identical firms, long rum equilibrium is characterized by:

  • A. P = AC
  • B. P = MC
  • C. MR = MC
  • D. All of the above

5. You are the manager of a firm that sells its product in a competitive market at a price of $50. Your firm's cost function is C = 40 + 5Q2. Your firm's maximum profits are:

  • A. 125
  • B. 250
  • C. 100
  • D. 85

6. A perfectly competitive firm faces:

  • A. A perfectly elastic demand function
  • B. A perfectly inelastic demand function
  • C. a demand function with unitary elasticity
  • D. none of the above

Which of the following statements is False?

A) The marginal revenue earned by a monopolist will always be less than the products price.

B) For a profit-maximizing monopolist, marginal rervenue equals marginal cost.

C)Typically there are numerous very close substitutes for the product of a monopolist.

D) An unregulated, profit-maximizing monopolist will not operate in the inelastic portion of the demand curve.

1. A monopolist can increase profits by decreasing production if its currently producing at a point where:

Select one:

P = MC

P > MC

P < MR

MR = MC

2. The reason a monopoly creates a deadweight loss is that a monopolist charges a price that is _________ marginal cost.

Select one:

the same as

greater than

less than

None of the other choices is correct

3. A monopolist maximizes profits when it produces an output at the point where:

Select one:

None of the other choices is correct

P > MC

P = MC

MR > MC

P < MR

4. A monopolist knows an increase in price will have no impact on total revenue when its price elasticity of demand is:

Select one:

price inelastic

perfectly elastic

price elastic

equal to 1 (in absolute terms)

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