Micro Econ Exam 3 TF 10
A single-price monopolist receives the maximum price for each unit of the good it sells; a perfectly price-discriminating monopolist does not.
False
By definition, monopolists sell a product for which there are absolutely no substitutes.
False
Economic "rent" is a payment received in excess of marginal cost.
False
Legal barriers to entry include patents, government licenses and economies of scale.
False
Monopolists are guaranteed to earn a positive economic profit because they are the only seller in their industry.
False
The monopolist's demand curve is perfectly inelastic.
False
At one time, monopolies were granted to people who were in the favor of kings and queens.
True
If a firm has no variable costs, the profit-maximizing price is also the revenue-maximizing price.
True
One of the assumptions of the theory of monopoly is that the single seller sells a product for which there are no close substitutes.
True
The Townsend Acts, passed by the British Parliament in 1767, imposed taxes on various products imported into the American colonies.
True
The U.S. Postal Service is an example of a public franchise.
True
The perfectly price-discriminating monopolist achieves resource allocative efficiency, while the single-price monopolist does not.
True
The profit-maximizing monopolist produces the quantity of output at which marginal revenue equals marginal cost.
True
The single-price monopolist produces the quantity of output at which marginal cost equals marginal revenue and charges a price that is greater than marginal revenue.
True
X-inefficiency occurs when a monopolist produces output at a cost that is greater than the lowest possible cost.
True