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