Ch. 9

Marginal revenue is: A. equal to the change in total revenue derived from the sale of one additional unit. B. equal to the market price in monopoly industries. C. always increasing in a monopoly. D. equal to total revenue in monopoly industries.

A. equal to the change in total revenue derived from the sale of one additional unit.

The demand curve facing a monopoly firm is: A. equivalent to the market demand curve. B. horizontal at the market equilibrium price. C. equivalent to the firm's marginal cost curve. D. upward sloping when the firm experiences economies of scale.

A. equivalent to the market demand curve.

A monopolist will maximize its profit when it produces the quantity of output where: A. MR = MC. B. P is maximized. C. MC is minimized. D. MR = P.

A. MR = MC.

A constantly declining long-run average cost curve is a characteristic of what type of industrial structure? A. perfect competition B. natural monopoly C. oligopoly D. monopoly

B. natural monopoly

The reason a monopoly imposes a deadweight loss on society is that: A. there is a gain in profitability to firms that would have been in the industry had there been no monopoly. B. social losses weigh heavily on public authorities. C. consumers are denied output for which they are willing to pay more than the cost of producing it. D. government is concerned about the negative impact of a monopoly on consumers.

C. consumers are denied output for which they are willing to pay more than the cost of producing it.

Which of the following is a characteristic of a monopoly firm? A. many buyers and sellers B. vertical individual demand curve C. barriers to entry D. easy entry and exit

C. barriers to entry

Market power means the ability to: A. earn a normal profit. B. eliminate competition. C. earn an economic profit. D. have some control over price.

D. have some control over price.

Compared with competitive markets, monopolies charge ______ prices and produce a ______ output. A. lower; higher B. higher; higher C. lower; lower D. higher; lower

D. higher; lower

Occasionally,________ may lead to pure monopoly; in other market conditions, they may limit competition___________ . barriers to entry; to a few oligopoly firms barriers to entry; to a natural monopoly deregulation; requiring new patent law deregulation; requiring new copyright law

barriers to entry; to a few oligopoly firms

Which of the following is most unlikely to present a barrier to entry into a market? market forces patent laws technological advantage deregulation

deregulation

When a natural monopoly exists in a given industry, the per-unit costs of production will be lowest when there are a large number of producers in the industry. lower for the smaller firms than for larger firms. minimized at the output that maximizes the industry's profitability. lowest when a single firm generates the entire output of the industry.

lowest when a single firm generates the entire output of the industry.

The use of sharp, temporary price cuts as a form of would enable traditional US automakers to discourage new competition from smaller electric car manufacturers. natural monopoly predatory pricing monopolistic competition copyright

predatory pricing