micro economics chapter 22

According to the graph, this firm is ________. taking a loss of $25 making a profit of 0 taking a loss of $30 making a profit of $25 taking a loss of $50

taking a loss of $25

According to the graph, if this firm produced at optimum efficiency, it would have an output of ________. X-10 14 X- more than 10, but less than 14 X- more than 14 X- less than 10

14

Which statement is the most accurate? The rationale for natural monopoly has been strengthened by deregulation. Your local phone and electric companies will probably continue to be monopolies for at least another 50 years Natural monopoly never had any economic basis. Deregulation and competition tend to lower costs.

Deregulation and competition tend to lower costs

Which statement is true about economic profit in the long run? X- Both the monopolist and the perfect competitor make one. ?- Only the perfect competitor makes one. Neither the monopolist nor the perfect competitor makes one. Only the monopolist makes one.

Only the monopolist makes one.

Which statement is true? ---->The monopolist and the perfect competitor both produce where MC equals MR. The perfect competitor, but not the monopolist, produces where MC equals MR. The monopolist, but not the perfect competitor, produces where MC equals MR. Neither the monopolist nor the perfect competitor produce where MC equals MR.

The monopolist and the perfect competitor both produce where MC equals MR.

Which statement is true? The monopolist is just as driven as the competitive firm to control costs and use resources efficiently. The monopolist often charges his customers higher prices and provides poorer service than he would if he had competitors. Growing foreign competition has had no effect on the quality of American products. None of the above.

The monopolist often charges his customers higher prices and provides poorer service than he would if he had competitors.

Which statement is true? X- The monopolist cannot lose money. X- The monopolist always operates a large firm. X- The monopolist will not lose money in the short run. The monopolist will not lose money in the long run.

The monopolist will not lose money in the long run.

(c) Calculate the firm's total profit. Total profit: $ (d) If the firm operates at optimum efficiency, how much will its output be? Optimum output : (e) If the firm were a perfect competitor, how much would its price be in the long run? Long run price : $

Total profit: $10

Which of the following is a natural monopoly? X- IBM the National Football League X- a local phone company ?- DeBeers Diamond Company

a local phone company

The monopolist is ________. a perfect competitor and has a downward sloping demand curve an imperfect competitor and has a horizontal demand curve an imperfect competitor and has a downward sloping demand curve a perfect competitor and has a horizontal demand curve

an imperfect competitor and has a downward sloping demand curve

The most efïcient output is found ________. X- where MC and MR cross X- where the ATC and demand curves cross at the bottom of the ATC curve when the demand and MR curves are equal

at the bottom of the ATC curve

The monopolist's demand and marginal revenue curves ________. X- cross X- are completely different X- are exactly the same coincide only at one unit of output

coincide only at one unit of output

In monopoly, price is always read off the ______ curve. demand MC MR ATC

demand

The basis for monopoly in the automobile industry would most likely be ________. X- control over an essential resource ?- economies of scale legal barriers

economies of scale

Each of the following is true about Walmart except that ________. it is the largest company in the world it pays its employees, on average, about the same as its competitors it drives hard bargains with suppliers and passes along the savings to its customers it is the largest employer in the United States

it pays its employees, on average, about the same as its competitors

Which statement is true? X- It is impossible for monopolies to exist in the United States. X- Once a monopoly is set up, it is impossible to dislodge it. Monopolies can be overcome only by market forces. X- Monopolies can be overcome only by the government. ?-None of the above.

none of the above

The monopolist produces at the minimum point of her ATC curve ________. none of the time X-some of the time X- most of the time X- all the time

none of the time

Using the data from the above figure, calculate the firm's total profit. Total profit : $ (b) If the firm operates at optimum efficiency, how much will its output be? Instructions: Round your answer to 1 decimal place. Optimum output : (c) If the firm were a perfect competitor, how much would its price be in the long run? Long run price: $

not $15, $9?

Calculate the firm's total profit. Instructions: Round your answer to 1 decimal place. Total profit : $ (b) If the firm operates at optimum efficiency, how much will its output be? Instructions: Round your answer to nearest whole number. Optimum output : (c) If the firm were a perfect competitor, how much would its price be in the long run? Instructions: Round your answer to nearest whole number. Long run price: $

not 13,12,10 16,10,16?

This firm is incurring a profit of $.

not 2, 20?

This firm is incurring a loss of $.

not 20, 18?

An example of government ownership of a monopoly is ________. X- the New York State Public Service Commission General Motors AT&T ?- the Tennessee Valley Authority

the Tennessee Valley Authority

When the monopolist is losing money, ________. X- we are in the long run X- we have to go back and check our work because monopolists don't lose money we are in the short run it is impossible to tell if we are in the short run or the long run

we are in the short run

The monopolist produces ________. X- at maximum output X- when price is highest X- at the minimum point of ATC where MC equals MR

where MC equals MR

If a monopolist has a straight-line demand curve, its marginal revenue curve ________. X- will lie below the demand curve at all points X- will cross the demand curve will be the same as the demand curve will fall twice as quickly as the demand curve

will fall twice as quickly as the demand curve

A downward sloping demand curve means ________. X- demand falls as output rises X- demand rises as output rises you have to lower your price to sell more total revenue declines as price is lowered

you have to lower your price to sell more