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.