Hacker- Unit 6

Which of the following is necessarily true of the profit maximizing equilibrium of s monopolist who sets a single price?

Price > marginal cost

Which of the following statements is true for a monopolist at the profit maximizing output level?

Price exceeds marginal revenue

A monopoly is different from a perfectly competitive firm in that a monopoly

has a marginal revenue curve that lies below its demand curve

Price discrimination occurs when

Differences in a product's price do not reflect differences in costs of production

If a monopoly is required to set quantity and price where demand equals marginal cost

It might require the payment of a subsidy to the firm

Generally monopolies are considered inefficient because they

Lead to an underallocation of resources in the affected market

A single price monopolist's marginal revenue is

Less than its price

The profit-maximizing output level produced by an unregulated monopoly is

Less than the socially optimal level, since the price paid by consumers exceeds the firm's marginal costs

In a competitive industry, equilibrium is when

Marginal Cost equals demand

An industry of 100 small firms, and the largest firm accounts for only two percent of sales. Brand names are considered a signal if quality. The industry described is best classified as

Oligopolistic

In a __________, it is sometimes assumed that the rival firms will match price decreases but not match price increased

Oligopoly

Interdependence among firms is a characteristic primarily associated with

Oligopoly

If a perfectly competitive industry were monopolized without any changes in cost conditions, the price and quantity produced would change in which of the following ways?

Price increases, quantity decreases

Assume that a profit-maximizing monopoly is charging a single price. If the monopoly can price discriminate and charge each consumer what j or she is will to pay, which of the following will occur?

The quantity of output produced will increase.

If the only two firms in an industry successfully collide to maximize their joint profit, the price for the product will be

Above the marginal cost of production

Monopolies are inefficient compared to perfectly competitive firms because monopolies

Charge a price greater than marginal cost

In the long run, a monopolistically competitive form is allocatively inefficient because the firm will

Charge a price higher than marginal cost

Which of the following best explains why it is difficult to maintain lasting collusive agreements?

Each firm realizes that its profits would increase if it were the only firm o violate the collusive agreement by increasing its production slightly

Which of the following statements is true for both monopolistically completive firms and a perfectly competitive firm in long-run, profit-maximizing equilibrium.

Economic profits equal zero, and marginal revenue equals marginal cost

A profit maximizing monopolist selects its output level in the

Elastic region of the demand curve

Which of the following best states the economic rationale for antitrust legislation?

A monopolist produces too little of the good, charging consumers a price that exceeds marginal cost of production

Assume that a monopolist is producing in the inelastic portion of the demand curve. Which of the following if the monopolist decreases its price?

Both total revenue and profits will decrease

Suppose the monopolistically competitive firm is producing 0M units of output. To maximize profits, it should do which if the following to output and price?

Decrease output and increase price

if a single firm can produce and supply an entire market at a lower unit cost than many small firms can, the long-run average total cost must be

Decreasing as the firm's output increases

Which of the following is true if a monopolist's marginal revenue is negative at the current level of output?

Demand for its product is price inelastic

Which of the following is true of a monopolistically completive firm in king run equilibrium?

Marginal revenue is equal to marginal cost, and price is equal to average total cost

A monopolist produces two unrelated goods, X and Y. The demand for X I'd currently price elastic and the demand for Y is currently price inelastic. To increase its total revenue, the firm should change the price of X and Y in which of the following ways?

Price of X decreases, Price of Y increases

monopolistically competitive firms are inefficient because they

Produce a lower level of output at a higher average cost than do perfectly competitive firms

Compared with firms in a perfectly competitive industry, firms in a monopolistically competitive industry are inefficient because they

Restrict their output level to maximize profits

Which of the following statements is true for perfectly competitive firms but not true for a monopoly?

The firm cannot affect the market price for its good

One justification for government regulation of a monopoly is that the unregulated monopoly

charges a price higher than a competitive market price

Which of the following is NOT a characteristic of monopolistically competitive markets?

long-run economic profits