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13 Dec 2019

Which of the following is true?

a. The more inelastic the demand, the closer marginal revenue is to price.

b. In the short run, a monopoly will shut down if P < AVC.

c. A monopolist produces on the inelastic portion of its demand.

d. A monopolist always earns an economic profit

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Hubert Koch
Hubert KochLv2
17 Dec 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.

14. Here are several statements about the demand and output of a monopoly producer: 1. For a monopolist, the change in total revenue brought about by producing an extra unit of output is always less than the current price of that output. II. A monopolist will maximize profit at the output where marginal revenue is as high as possible above marginal cost III. A monopoly firm will maximize profit by producing where demand is inelastic Which of the above statements are true? A) I only B) II only C) III only D) I and II E) I and III F) II and III G) I and II and III ) none of the statements are true

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