Pure Monopoly - Quiz
Use the following graph for a profit-maximizing pure monopoly to answer the next question. The firm will set its price at
0J.
Suppose that a pure monopoly calculates that at its present output level, marginal revenue is $1 and marginal cost is $2. The monopoly could maximize profits or minimize losses by
increasing price and decreasing output.
A pure monopoly may generate economic profits because
of barriers to entry.
In many large U.S. cities, taxicab companies operate as near monopolies because of
licenses.
The demand curve faced by a nondiscriminating pure monopoly is
the same as the industry's demand curve.
Use the following graph to answer the next question. If the industry were a pure monopoly, the profit-maximizing price would be
$16.
Use the following graph to answer the next question. At its short-run equilibrium, this pure monopoly generates
an economic profit.
Use the following graph for a pure monopoly operating in the short-run to answer the next question. To maximize profits, this firm should charge a price of
0B.
A pure monopoly sells 6 units of a product per day at a unit price of $15. If it lowers the price to $14, its total revenue increases by $22. This implies that its sold output increases by
2 units per day.
Pure monopoly refers to
a single firm producing a product for which there are no close substitutes.