Economics Chapter 14

1) The demand curve for a monopoly is A) horizontal because the demand is perfectly elastic. B) downward sloping. C) vertical because the demand is perfectly inelastic. D) upward sloping. E) undefined because it is the only supplier in the market.

b.

The deadweight loss associated with a monopoly occurs because the monopolist A) maximizes profits. B) produces an output level less than the socially optimal level. C) produces an output level greater than the socially optimal level. D) equates marginal revenue with marginal cost.

b.

A monopolist's profits with price discrimination will be A) lower than if the firm charged a single, profit-maximizing price. B) the same as if the firm charged a single, profit-maximizing price. C) higher than if the firm charged just one price because the firm will capture more consumer surplus. D) higher than if the firm charged a single price because the costs of selling the good will be lower.

c.

The social cost of a monopoly is equal to its A) economic profit. B) fixed cost. C) deadweight loss. D) variable cost.

c.

Which of the following statements is true? A) When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price. B) Average revenue is the same as price for monopoly firms but not competitive firms. C) When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price. D) Average revenue is the same as price for competitive firms but not monopoly firms.

c.

A monopolist faces A) a perfectly elastic demand curve. B) a perfectly inelastic demand curve. C) a horizontal demand curves. D) a downward-sloping demand curve.

d.