ECON_Ch11

The monopolist's demand curve slopes downward because:

. the monopolist is a price maker in the market

Refer to Table 11-1. The firm earns the maximum total revenue when it produces _____ units.

5

The marginal revenue curve of a monopolist:

is downward-sloping

The shape of the monopolist's demand curve indicates that:

. price and output are inversely related for the firm.

The marginal revenue curve of a monopolist lies below the demand curve because:

. the monopolist must lower price on all units sold in order to sell additional units.

Refer to Table 11-1. If the marginal cost of producing each unit is $30, what is the firm's profit-maximizing level of output?

4

Which of the following is true of a monopolist?

A monopolist can choose to produce at any price along the market demand curve.

Refer to Figure 11-3. The profit of the monopolist is shown by the area _____.

AFGB

Refer to Figure 11-2. The profit earned by the monopolist is given by the area _____.

AFHB

Which of the following is true of the demand curve that a monopolist faces?

It is the same as the market demand curve.

Which of the following conditions generally holds when a monopoly firm is producing its profit-maximizing level of output?

MC = MR < AR

Refer to Figure 11-2. The equilibrium price in the monopoly market is _____.

OA

Refer to Figure 11-3. The equilibrium price charged by a profit-maximizing monopoly firm is _____.

OA

Refer to Figure 11-2. The quantity of output produced by the monopolist is _____.

OC

Refer to Figure 11-3. A profit-maximizing monopoly firm will produce output equal to _____.

OC

Refer to Figure 11-1. An unregulated monopolist will sell _____ units of output at a price of_____ to maximize profit.

OJ and OW

Which of the following is true for a monopoly firm?

The demand curve is a declining average revenue curve.

Which of the following is true for a monopoly firm?

The monopolist's demand curve is downward-sloping and the marginal revenue curve lies below the average revenue curve.

Which of the following is not necessarily true at the profit-maximizing quantity for a monopolist?

The slope of the marginal revenue curve equals the slope of the marginal cost curve.

Refer to Figure 11-2. If the government wishes to regulate the monopoly firm by setting the price at OB in the market, the monopolist will:

continue to earn economic profits

A monopoly firm will maximize profits by producing the level of output where:

the difference between total cost and total revenue is maximized.

Refer to Table 11-2. The economic profit earned by the firm by producing the profit-maximizing level of output is _____.

$18

What is the marginal revenue associated with the sale of the fifth unit in Table 11-2?

$2

Refer to Table 11-1. What is the marginal revenue when 3 units are sold?

$50

The demand curve for a firm operating in a monopoly market is the same as _____.

its average revenue curve