Econ Chapter 12

14) The outcome of first-degree price discrimination is: A) Pareto efficient with equity. B) Pareto efficient with inequity. C) Pareto inefficient with inequity. D) Pareto inefficient but is equitable.

B) Pareto efficient with inequity.

3) Which of the following statements explains why monopolies weaken the functioning of the invisible hand? A) A monopoly is a price taker. B) The quantity produced by a monopoly is too low. C) Monopolies face an upward sloping demand curve. D) A monopoly sets the price of its good below marginal costs.

B) The quantity produced by a monopoly is too low.

36) Which of the following statements is true of the demand curve and the marginal revenue curve of a monopolist? A) Both curves have the same intercept on the price axis. B) The demand curve is downward sloping while the marginal revenue curve is upward sloping. C) The intercept of the demand curve on the price axis is higher than the intercept of the marginal revenue curve. D) The intercept of the demand curve on the price axis is lower than the intercept of the marginal revenue curve.

A) Both curves have the same intercept on the price axis.

15) Which of the following statements is true of a perfectly competitive market? A) Innovation is less likely in a competitive market because of free entry and exit of firms. B) Innovation is likely in a competitive market because of free entry and exit of firms. C) The firms in a competitive market invest more in R&D because they face an inelastic demand curve. D) The firms in a competitive market invest more in R&D because their demand for resources is perfectly elastic.

A) Innovation is less likely in a competitive market because of free entry and exit of firms.

9) Which of the following was an implication of the U.S. governmentʹs Clean Air Act Amendments (CAAA) of 1977? A) It acted as a barrier to entry. B) It increased consumer surplus. C) It reduced the profits of existing firms. D) It reduced the market power of existing firms.

A) It acted as a barrier to entry.

7) Sellers in which of the following market structures are likely to have the highest market power? A) Monopoly B) Oligopoly C) Perfect competition D) Monopolistic competition

A) Monopoly

20) Which of the following statements is true? A) Network effects act as barriers to entry in a market. B) Economies of scale act as incentives for new firms to enter a market. C) If a firm is enjoying economies of scale, then its product must have network effects. D) If a firmʹs product has network effects, then the firm must be enjoying economies of scale.

A) Network effects act as barriers to entry in a market.

2) In the U.S., the ________ is a law to keep markets open and competitive. A) Sherman act B) Samuelson act C) Monopoly act D) pro-competition act

A) Sherman act

17) Which of the following statements is true? A) The basis for both first-degree price discrimination and third-degree price discrimination is differences in the buyersʹ willingness to pay for a good. B) The basis for both first-degree price discrimination and third-degree price discrimination is differences in the sellersʹ willingness to accept payment for a good. C) The basis for first-degree price discrimination is differences in willingness to pay, whereas the basis for third-degree price discrimination is differences in the sellersʹ willingness to accept payment for a good. D) The basis for first-degree price discrimination is differences in the sellerʹs willingness to accept payment for a good, whereas the basis for third-degree price discrimination is differences in buyersʹ willingness to pay for a good.

A) The basis for both first-degree price discrimination and third-degree price discrimination is differences in the buyersʹ willingness to pay for a good.

2) At a certain level of production, the marginal revenue and marginal cost of a monopolist are $8 and $6, respectively. Which of the following statements is true in this context? A) The monopolist should expand production. B) The monopolist should contract production. C) The profits of the monopolist are maximized. D) The profits of the monopolist are minimized.

A) The monopolist should expand production.

1) A market structure in which there is no competition is referred to as ________. A) a monopoly B) an oligopoly C) a monopsony D) monopolistic competition

A) a monopoly

17) A market in which a firm emerges as a monopoly due to large economies of scale is referred to as: A) a natural monopoly. B) an explicit monopoly. C) an implicit monopoly. D) an exhaustive monopoly.

A) a natural monopoly.

3) If the marginal cost of a monopolist exceeds its marginal revenue, ________. A) additional production reduces profits B) additional production enhances profits C) the difference between its marginal revenue curve and demand curve is at the highest D) the difference between its marginal revenue curve and demand curve is at the lowest

A) additional production reduces profits

1) The policy that aims to regulate and prevent anti-competitive pricing in the United States is referred to as: A) antitrust policy. B) anticompetition policy. C) monopoly regulation policy. D) consumer protection policy.

A) antitrust policy.

10) Third-degree price discrimination occurs when: A) different groups of consumers are charged different prices. B) consumers are charged different prices at different points of time. C) consumers are charged different prices according to their willingness to pay. D) consumers are charged different prices based on the characteristics of their purchases.

A) different groups of consumers are charged different prices.

7) Perfect price discrimination is also referred to as: A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) fourth-degree price discrimination.

A) first-degree price discrimination.

4) A price maker is a firm that: A) has the power to affect the price of the product it sells. B) earns economic profits in both the short run and the long run. C) can sell any quantity of its product at the prevailing market price. D) sells its products at a price equal to the marginal cost of production.

A) has the power to affect the price of the product it sells.

16) Encouraging formation of monopolies provides firms an incentive to: A) innovate. B) increase social surplus. C) hire less resources in production. D) decrease deadweight loss.

A) innovate.

2) When a firm obtains market power through barriers to entry created not by the firm, but by the government, it is referred to as: A) legal market power. B) regulated market power. C) firm-biased market power. D) differentiated market power.

A) legal market power.

4) Patents are a source of: A) legal market power. B) natural market power. C) regulated market power. D) firm-biased market power.

A) legal market power.

7) A copyright is a source of: A) legal market power. B) natural market power. C) regulated market power. D) competitive market power.

A) legal market power.

4) A socially-optimal price regulation will NOT work if: A) marginal cost is less than average total cost. B) marginal cost is less than average fixed cost. C) marginal cost is greater than average total cost. D) marginal cost is greater than average fixed cost.

A) marginal cost is less than average total cost.

3) An efficient price is a price set at: A) marginal cost. B) opportunity cost. C) average fixed cost. D) average variable cost.

A) marginal cost.

4) At the profit-maximizing level of production of a monopolist, ________. A) marginal revenue equals marginal cost B) marginal revenue exceeds marginal cost C) marginal revenue is less than marginal cost D) both marginal revenue and marginal cost are negative

A) marginal revenue equals marginal cost

5) Greenaqua Corp. was given the exclusive right to produce and sell its newly introduced water purifier for 20 years. The right granted to Greenaqua is an example of a: A) patent. B) blueprint. C) copyright. D) trademark

A) patent.

12) If a monopoly engages in first-degree price discrimination: A) social surplus is maximized. B) consumer surplus is maximized. C) producer surplus is minimized. D) the deadweight loss is maximized.

A) social surplus is maximized.

15) The price effect of a price decrease by a monopolist refers to: A) the loss in revenue due to the price reduction. B) the increase in sales due to the price reduction. C) the increase in revenue because of an increase in sales. D) the decrease in the demand for labor due to the lower price of the final product.

A) the loss in revenue due to the price reduction.

14) A network externality refers to a situation when: A) the value of a product increases as more consumers start to use it. B) firms collude to sell products at a price higher than the equilibrium market price. C) a firm that has control over key resources auctions the resources off to other firms. D) the government interferes to prevent the concentration of market power in the hands of a few firms.

A) the value of a product increases as more consumers start to use it.

4) Which of the following firms is most likely to have a constant marginal cost? A) A firm that is a price taker B) A firm that has extremely high fixed costs C) A firm that has extremely high variable costs D) A firm that faces a horizontal demand curve

B) A firm that has extremely high fixed costs

2) Which of the following statements is true? A) A monopoly is a price taker because it faces a downward sloping demand curve. B) A monopoly is a price maker because it faces a downward sloping demand curve. C) A perfectly competitive firm is a price taker because it faces a downward sloping demand curve. D) A perfectly competitive firm is a price maker because it faces a downward sloping demand curve.

B) A monopoly is a price maker because it faces a downward sloping demand curve.

15) Which of the following statements correctly differentiates between a monopoly and a perfectly competitive firm? A) A perfectly competitive firm faces an upward sloping demand curve, whereas a monopoly faces a horizontal demand curve. B) A perfectly competitive firm sets its product price at its marginal cost, whereas a monopoly sets the price above its marginal cost. C) A perfectly competitive firm faces a horizontal demand curve, whereas a monopoly faces an upward sloping demand curve. D) A perfectly competitive firm sets its product price above its marginal cost, whereas a monopoly sets its product price equal to its marginal cost.

B) A perfectly competitive firm sets its product price at its marginal cost, whereas a monopoly sets the price above its marginal cost.

24) Which of the following statements is true? A) A natural monopoly always arises from government intervention in the market. B) An increase in consumer demand can change a natural monopoly into a multi-seller market. C) A natural monopoly earns higher profits than a monopolistically competitive firm because it faces an upward sloping market demand curve. D) A natural monopoly earns higher profits than a monopolistically competitive firm because it faces a horizontal market demand curve.

B) An increase in consumer demand can change a natural monopoly into a multi-seller market.

21) Which of the following statements correctly identifies a similarity between network effects and economies of scale? A) Both are related to costs incurred by a firm. B) Both act as barriers to entry in a market. C) Both act as disincentives to monopolies. D) Both are related to the number of consumers using a firmʹs product.

B) Both act as barriers to entry in a market.

12) Which of the following is an example of a good produced under perfect competition? A) Cars B) Corn C) Bottled water D) Patented software

B) Corn

8) ________ is a market structure where only one firm provides a good or service that has no close substitutes. A) Oligopoly B) Monopoly C) Perfect competition D) Monopolistic competition

B) Monopoly

6) Perfect price discrimination occurs when: A) a firm charges wealthier buyers a lower price. B) a firm charges each buyer exactly their willingness to pay. C) a firm charges the same buyer different prices at different points of time. D) a firm charges different buyers according to the characteristic of their purchase.

B) a firm charges each buyer exactly their willingness to pay.

14) The quantity effect of a price reduction causes: A) a decrease in revenue because of a lower price. B) an increase in revenue because of increased sales. C) an increase in labor demand due to increased sales of the product. D) a decrease in labor demand because of a lower price of the final product.

B) an increase in revenue because of increased sales.

16) Over a particular price range, if the quantity effect of a price decrease is larger than the price effect, it implies that: A) demand is inelastic in the price range. B) demand is elastic in the price range. C) the demand curve is vertical in the price range. D) the demand curve is upward sloping in the price range.

B) demand is elastic in the price range.

17) Over a particular price range, if the quantity effect of a price decrease is smaller than the price effect, it implies that: A) demand is elastic in the price range. B) demand is inelastic in the price range. C) the demand curve is horizontal in the price range. D) the demand curve is upward sloping in the price range.

B) demand is inelastic in the price range.

15) As a firm increases its output, its average total cost decreases. This is an outcome of: A) the Law of Demand. B) economies of scale. C) diseconomies of scale. D) the Law of Diminishing Returns.

B) economies of scale.

5) A firmʹs objective behind charging different prices to different consumers for the same good is to: A) enhance goodwill. B) enhance its profits. C) enhance social surplus. D) enhance its market power.

B) enhance its profits.

22) If a new seller enters a market to compete with an existing natural monopoly, it will: A) decrease the costs for both the sellers. B) increase the costs of production for both the sellers. C) increase the production costs for the existing seller, and a decrease in the costs for the new entrant. D) decrease the production costs for the existing seller, and an increase in the costs for the new entrant.

B) increase the costs of production for both the sellers.

41) The total revenue curve of a monopolist: A) is positively sloped when marginal revenue is negative. B) is negatively sloped when marginal revenue is negative. C) is positively sloped when the marginal revenue curve is upward sloping. D) is negatively sloped when the marginal revenue curve is downward sloping.

B) is negatively sloped when marginal revenue is negative.

38) When a monopolist sells positive levels of output, its demand curve: ' A) lies below its marginal revenue curve. B) lies above its marginal revenue curve. C) and marginal revenue curve overlap. D) is vertical while its marginal revenue curve is horizontal.

B) lies above its marginal revenue curve.

10) If a monopolist owns or controls a key resource necessary for production, it is a source of: A) legal market power. B) natural market power. C) regulated market power. D) restricted market power.

B) natural market power

12) Economies of scale in production act as a source of: A) legal market power. B) natural market power. C) restricted market power. D) regulated market power.

B) natural market power

11) In Barylia, Greenaqua Corp. is the sole controller of a resource required for the production of bottled drinking water. Therefore, Greenaqua Corp. enjoys: A) legal market power. B) natural market power. C) regulated market power. D) restricted market power.

B) natural market power.

3) A ________ is the privilege granted to an individual or company by the government, which gives them the sole right to produce and sell a good. A) brand B) patent C) copyright D) trademark

B) patent

13) The quantity effect of a price decrease by a monopolist is based on: A) the Law of Supply. B) the Law of Demand. C) the Law of Increasing Returns. D) the Law of Diminishing Returns.

B) the Law of Demand.

16) Average total cost decreases with an increase in output because: A) the total variable cost decreases with an increase in output. B) the average fixed cost decreases with an increase in output. C) the marginal cost of production increases with an increase in output. D) diminishing marginal returns sets in after a particular level of production.

B) the average fixed cost decreases with an increase in output

39) As a monopolist expands its output: A) the difference between the demand curve and the marginal revenue curve decreases. B) the difference between the demand curve and the marginal revenue curve increases. C) the slope of the demand curve decreases, while the slope of the marginal revenue curve increases. D) the slope of the demand curve increases, while the slope of the marginal revenue curve decreases.

B) the difference between the demand curve and the marginal revenue curve increases.

1) Which of the following statements is true? A) A monopolist faces an upward sloping demand curve. B) A perfectly competitive firm faces an upward sloping demand curve. C) A monopolist can increase the price of its product and not lose all of its business. D) A perfectly competitive firm can increase the price of its product without losing its business

C) A monopolist can increase the price of its product and not lose all of its business.

23) Which of the following statements is true? A) A monopolist has a vertical supply curve because it is a price taker. B) A monopolistʹs supply curve is the supply curve of the entire market. C) A monopolist does not have a supply curve because its production decision is independent of price. D) A monopolist has a horizontal supply curve because it is the only seller in the market.

C) A monopolist does not have a supply curve because its production decision is independent of price.

19) Which of the following statements is true? A) Network effects arise because of economies of scale. B) Economies of scale arise because of network effects. C) Economies of scale act as barriers to entry into a market. D) Network effects provide incentives to new sellers to enter the market.

C) Economies of scale act as barriers to entry into a market.

1) Which of the following statements is true? A) Monopoly is characterized by no entry barriers. B) Perfect competition is characterized by high entry barriers. C) Firms in a market with entry barriers are likely to have more market power than firms in a market with no entry barriers. D) Firms in a market with no entry barriers are likely to have more market power than firms in a market with entry barriers.

C) Firms in a market with entry barriers are likely to have more market power than firms in a market with no entry barriers.

5) ________ refers to the ability of sellers to affect market prices. A) Goodwill B) Market hold C) Market power D) Capital adequacy

C) Market power

2) The effect of the invisible hand is likely to be the strongest under which market structure? A) Oligopoly B) Monopoly C) Perfect competition D) Monopolistic competition

C) Perfect competition

3) Which of the following market structures provides socially efficient outcomes? A) Oligopoly B) Monopoly C) Perfect competition D) Monopolistic competition

C) Perfect competition

6) In which of the following market structures does a seller have NO market power? A) Monopoly B) Oligopoly C) Perfect competition D) Monopolistic competition

C) Perfect competition

7) Which of the following statements is true of price makers? A) The supply curve of price makers is downward sloping. B) The demand curve that price makers face is upward sloping. C) Price makers set the price of a good after they determine how much to produce. D) Price makers determine how much to produce after they set the price of a good.

C) Price makers set the price of a good after they determine how much to produce.

16) Which of the following statements correctly identifies a similarity between monopoly and perfect competition? A) Entry is restricted in both market structures. B) Price equals marginal cost in both market structures. C) Production is expanded until marginal revenue equals marginal cost in both the market structures. D) Firms face an upward sloping demand curve and a downward sloping marginal revenue curve in both the market structures.

C) Production is expanded until marginal revenue equals marginal cost in both the market structures.

8) Which of the following correctly identifies a problem with price regulation? A) It minimizes social surplus. B) It minimizes consumer surplus. C) Sellers do not have an incentive to cut costs. D) Government intervention increases deadweight loss

C) Sellers do not have an incentive to cut costs.

37) Which of the following statements is true of the demand curve and the marginal revenue curve of a monopolist? A) Both curves overlap at all levels of output. B) Both curves have the same intercept on the quantity axis. C) The demand curve has a higher intercept on the quantity axis than the marginal revenue curve. D) Both curves have different intercepts on both the quantity axis and the price axis.

C) The demand curve has a higher intercept on the quantity axis than the marginal revenue curve.

1) Which of the following statements is true? A) Under monopoly, the seller sets the price of its good below marginal costs. B) Under perfect competition, sellers set the price of their goods below marginal costs. C) Under monopoly, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs. D) Under perfect competition, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs.

C) Under monopoly, prospective buyers may not be able to buy a good even if they have a willingness to pay above marginal costs.

3) If a monopolist decides to charge a higher price for its product, it will yield: A) a lower revenue per unit sold but a higher number of units sold. B) a lower revenue per unit sold and a lower number of units sold. C) a higher revenue per unit sold but a lower number of units sold. D) a higher revenue per unit sold and a higher number of units sold.

C) a higher revenue per unit sold but a lower number of units sold.

1) If the marginal revenue of a producer exceeds his marginal cost: A) profit is maximized. B) profit is minimized. C) additional production enhances profits. D) additional production reduces profits.

C) additional production enhances profits.

7) A fair-returns price is a price set at: A) marginal cost. B) average fixed cost. C) average total cost. D) average variable cost.

C) average total cost.

3) When compared to a perfectly competitive industry, in a monopoly: A) both consumer surplus and social surplus are larger. B) consumer surplus is lower but social surplus is larger. C) both consumer surplus and social surplus are smaller. D) consumer surplus is higher but social surplus is smaller.

C) both consumer surplus and social surplus are smaller

2) Compared to a firm under perfect competition, a monopolist: A) charges less and produces less. B) charges less and produces more. C) charges more and produces less. D) charges more and produces more.

C) charges more and produces less.

6) A ________ is an exclusive right granted by the government to an authorʹs intellectual property. A) patent B) blueprint C) copyright D) trademark

C) copyright

8) A musician was guaranteed by the government that no one else could replicate or sell his music CDs. This is an example of a: A) brand. B) patent. C) copyright. D) trademark.

C) copyright.

9) Under fair-returns price regulation: A) deadweight loss is likely to be maximized. B) deadweight loss is likely to be minimized. C) firms are less likely to innovate because they earn zero profits. D) firms are more likely to innovate because they earn positive profits.

C) firms are less likely to innovate because they earn zero profits.

23) Everything else remaining unchanged, if a new seller enters a market to compete with an existing monopoly that is enjoying economies of scale, it will lead to: A) higher profits for both firms. B) higher profits for the existing firm. C) lower profits for the existing firm. D) higher market power for the existing firm.

C) lower profits for the existing firm.

5) A socially optimal price: A) maximizes consumer surplus and minimizes producer surplus. B) maximizes producer surplus and minimizes consumer surplus. C) maximizes total surplus. D) maximizes deadweight loss.

C) maximizes total surplus.

1) A market structure in which identical goods are produced by several different firms and sold at the market determined price is referred to as: A) an oligopoly. B) a monopoly. C) perfect competition. D) monopolistic competition.

C) perfect competition.

13) If a monopoly engages in first-degree price discrimination: A) social surplus is zero. B) producer surplus is zero. C) the deadweight loss is zero. D) consumer surplus is positive.

C) the deadweight loss is zero.

11) A certain amusement park offers a 50 percent discount to kids between the age of 8 and 14 years. This is an example of: A) shadow pricing. B) first-degree price discrimination. C) third-degree price discrimination. D) second-degree price discrimination

C) third-degree price discrimination.

40) If a monopolist faces a linear demand curve, its marginal revenue curve will be: A) horizontal. B) vertical. C) twice as steep as the demand curve. D) four times as steep as the demand curve.

C) twice as steep as the demand curve.

35) In case of an increase in product prices: A) the price effect is always zero. B) the quantity effect is always zero. C) when the price effect dominates the quantity effect, total revenue is rising. D) when the price effect dominates the quantity effect, total revenue is falling.

C) when the price effect dominates the quantity effect, total revenue is rising.

2) Which of the following does a social planner necessarily need to know to restore efficiency in a monopoly market? A) The monopolistʹs marginal costs only B) The buyersʹ demand for a close substitute of the product sold in the market C) The monopolistʹs marginal revenue and the tax levied on the sale of the good D) The monopolistʹs marginal costs and the buyersʹ willingness to pay for the goo

D) The monopolistʹs marginal costs and the buyersʹ willingness to pay for the goo

17) Which of the following firms is most likely to spend on innovation? A) A perfectly competitive firm B) A monopoly with absolutely no competition C) A firm that is the only controller of a key resource necessary for production D) A firm that enjoys some monopolistic power, but faces strong competition from its rivals

D) A firm that enjoys some monopolistic power, but faces strong competition from its rivals

22) Which of the following statements is true of a monopolistʹs supply curve? A) The supply curve is vertical. B) The supply curve is upward sloping. C) The supply curve is downward sloping. D) A monopolist does not have a supply curve.

D) A monopolist does not have a supply curve.

18) Firm A is a monopoly because of network effects, whereas Firm B is a natural monopoly. Which of the following statements is likely to be true in this context? A) The average total costs of both firms decrease as they increase their output. B) The value of the product that both firms produce increases with an increase in the number of buyers. C) Firm A enjoys a monopoly status because its average total cost decreases with increase in output, whereas Firm B enjoys a monopoly status because the value of its product increases as more consumers buy it. D) Firm B enjoys a monopoly status because its average total cost decreases with increase in output, whereas Firm A enjoys a monopoly status because the value of its product increases as more consumers buy it.

D) Firm B enjoys a monopoly status because its average total cost decreases with increase in output, whereas Firm A enjoys a monopoly status because the value of its product increases as more consumers buy it.

11) Which of the following statements is true? A) A monopolistʹs product often has close substitutes. B) Firms under perfect competition produce differentiated products. C) Firms under monopolistic competition produce identical products. D) Firms under oligopoly produce either identical or differentiated products.

D) Firms under oligopoly produce either identical or differentiated products.

8) The pricing rule for a monopolist is: A) P = MR > MC. B) P > MR > MC. C) P=MR=MC. D) P > MR = MC.

D) P > MR = MC.

13) Which of the following is an example of a good produced under monopoly? A) CDs B) Books C) Aerated drinks D) Patented software

D) Patented software

8) Second-degree price discrimination occurs when: A) each consumer is charged exactly their willingness to pay. B) different groups of consumers are charged different prices. C) consumers are charged different prices at different points of time. D) consumers are charged different prices based on characteristics of their purchase.

D) consumers are charged different prices based on characteristics of their purchase.

9) The price chosen by a monopolist: A) maximizes social surplus. B) maximizes consumer surplus. C) is dependent on the production of other firms. D) is independent of the production of other firms.

D) is independent of the production of other firms.

15) Price discrimination is never perfect because: A) it increases consumer surplus. B) it is regulated by the government. C) it lowers profits of producers to an extent. D) it is impossible to know consumersʹ willingness to pay.

D) it is impossible to know consumersʹ willingness to pay.

4) When firms charge different prices to different consumers for the same good or service, it is referred to as ________. A) price bias B) shadow pricing C) predatory pricing D) price discrimination

D) price discrimination

10) In comparison to firms in other market structures, monopolists: A) maximize social surplus. B) encourage the entry and exit of new firms. C) set price lower than marginal revenue. D) produce goods that do not have close substitutes.

D) produce goods that do not have close substitutes.

14) The investment by firms in the creation of products not yet available on the market is referred to as: A) working capital. B) creative capital. C) innovation funds. D) research and development.

D) research and development.

9) Buyers who buy in bulk are often offered discounts. This is an example of: A) predatory pricing. B) first-degree price discrimination. C) third-degree price discrimination. D) second-degree price discrimination.

D) second-degree price discrimination.

13) A key resource is a material: A) that is unlimited in supply. B) that is rationed by the government. C) that is available to monopolies only. D) that is essential for the production of a good.

D) that is essential for the production of a good

16) When the price of the same product varies by locational attributes, it is an example of: A) predatory pricing. B) first-degree price discrimination. C) second-degree price discrimination. D) third-degree price discrimination.

D) third-degree price discrimination

33) In case of a decrease in product prices: A) the quantity effect always dominates the price effect. B) the price effect always dominates the quantity effect. C) when the quantity effect dominates the price effect, total revenue decreases. D) when the price effect dominates the quantity effect, total revenue decreases.

D) when the price effect dominates the quantity effect, total revenue decreases.

32) In case of a decrease in product prices: A) the quantity effect always dominates the price effect. B) the price effect always dominates the quantity effect. C) when the price effect dominates the quantity effect, total revenue increases. D) when the quantity effect dominates the price effect, total revenue increases.

D) when the quantity effect dominates the price effect, total revenue increases.

34) In case of an increase in product prices: A) the quantity effect always dominates the price effect. B) the price effect always dominates the quantity effect. C) when the quantity effect dominates the price effect, total revenue is rising. D) when the quantity effect dominates the price effect, total revenue is falling.

D) when the quantity effect dominates the price effect, total revenue is falling.

42) The total revenue curve of a monopolist is at its maximum point when: \A) marginal cost is zero. B) marginal cost is positive. C) marginal revenue is zero. D) marginal revenue is positive.

c) marginal revenue is zero.