1. A natural monopoly occurs when:

    A. Long-run average costs decline continuously through the range of demand.
  2. A non-discriminating monopolist:

    B. Will never produce in the output range where demand is inelastic.
  3. A purely monopolistic industry:

    B. Is characterised by all of the answers given.
  4. Price exceeds marginal revenue for the pure monopolist because:

    B. The demand curve is down-sloping.
  5. For an imperfectly competitive firm:

    C. The marginal revenue curve will lie below the demand curve, because any reduction in price applies to all units sold.
  6. What doe economies of scale, the ownership of essential raw materials, and patents have in common?

    A. They are all 'barriers to entry'.
  7. The monopolistic firm's demand curve:

    A. Is less elastic than a purely competitive firm's demand curve.
  8. Pure monopolists may earn economic profits in the long run because:

    B. Of 'barriers to entry'.
  9. When total revenue is increasing:

    A. Marginal revenue is positive.
  10. a pure monopolist can be defined as:

    A. A one-firm industry.
Card Set
Chapter 11