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A natural monopoly occurs when:
A. long-run average costs decline continuously through the range of demand.
B. Long-run average costs rise continuously as output is increased.
C. A firm owns or controls some resource that is essential to production.
D. Economies of scale are quickly exhausted.
A. Long-run average costs decline continuously through the range of demand.
A non-discriminating monopolist:
A. May produce where demand is either elastic or inelastic, depending upon the level of production costs.
B. Will never produce in the output range where demand is inelastic.
C. Will never produce in the output range where demand is elastic.
D. will never produce in the output range where marginal revenue is positive.
B. Will never produce in the output range where demand is inelastic.
A purely monopolistic industry:
A. Is characterised by a downward sloping demand curve.
B. Is characterised by all of the answers given.
C. Produces a product or service for which there are no close substitutes.
D. Is characterised by significant entry barriers.
B. Is characterised by all of the answers given.
Price exceeds marginal revenue for the pure monopolist because:
A. The average and marginal revenue curves are identical.
B. The demand curve is down-sloping.
C. The monopolist produces a smaller output than would a purely competitive firm.
D. The law of diminishing returns is inapplicable.
B. The demand curve is down-sloping.
For an imperfectly competitive firm:
A. Total revenue is a straight, up-sloping line, because a frim's sales are independent of product price.
B. The marginal revenue curve will lie above the demand curve, because any reduction in price applies to all units sold.
C. The marginal revenue curve will lie below the demand curve, because any reduction in price applies to all units sold.
D. The marginal revenue curve will lie below the demand curve, because any reduction in price applies only to the extra unit sold.
C. The marginal revenue curve will lie below the demand curve, because any reduction in price applies to all units sold.
What doe economies of scale, the ownership of essential raw materials, and patents have in common?
A. They are all 'barriers to entry'.
B. They all help explain why a monopolist's demand and marginal revenue curves coincide.
C. They must all be present before price discriminiation can be practised.
D. They all help explain why the long-run average cost curve is U-shaped.
A. They are all 'barriers to entry'.
The monopolistic firm's demand curve:
A. Is less elastic than a purely competitive firm's demand curve.
B. Coincides with its marginal revenue curve.
C. Is perfectly inelastic.
D. Is perfectly elastic.
A. Is less elastic than a purely competitive firm's demand curve.
Pure monopolists may earn economic profits in the long run because:
A. Of rising average fixed costs.
B. Of 'barriers to entry'.
C. of advertising.
D. Marginal revenue is constant as sales increase.
B. Of 'barriers to entry'.
When total revenue is increasing:
A. Marginal revenue is positive.
B. Marginal revenue may be either positive or negative.
C. The demand curve is relatively inelastic.
D. Marginal revenue is negative.
A. Marginal revenue is positive.
a pure monopolist can be defined as:
A. A one-firm industry.
B. Any firm which can engage in price discrimination.
C. Any firm which realises all existing economies of scale.
D. Any firm whose demand curve is down-sloping.
A. A one-firm industry.
Author
Anonymous
ID
177112
Card Set
ECON910
Description
Chapter 11
Updated
2012-10-12T01:00:20Z
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