The four statements below describe different characteristics of a monopolist, but one statement is false. Pick the one option that is false. Select one: O i. A monopolist has a downward sloping demand curve O ii. A monopolist can increase price if it reduces the quantity sold iii. A monopolist's marginal revenue curve is always below its demand curve O iv. A monopolist profit maximises by producing at the point where marginal revenue = price

The four statements below describe different characteristics of a monopolist, but one statement is false. Pick the one option that is false. Select one: O i. A monopolist has a downward sloping demand curve O ii. A monopolist can increase price if it reduces the quantity sold iii. A monopolist's marginal revenue curve is always below its demand curve O iv. A monopolist profit maximises by producing at the point where marginal revenue = price

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.1P

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A single-price monopolist is currently producing at an output level where marginal revenue is $14, marginal cost is $16, AVC=$13, and ATC= $15. It is assumed that the monopolist, as usual, chooses its price on the demand curve. To maximize profit or minimize losses in the short run, this monopolist should O A. decrease the price and increase the level of output. O B. increase the price and the level of output. O C. leave the market. O D. decrease the price and the level of output. O E. increase the price and decrease the level of output.
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A monopolist has a total cost curve represented by TC = 50 + 2Q + Q², and a marginal cost curve represented by MC = 2 + 2Q. The monopolist faces the demand curve P = 100 –3Q. Price is in dollars and quantity is in thousands. What is the monopolist's profit? (pick the closest answer) O $1,000,600 O $550,250 $750,000 O $330,330 A Moving to another question will save this response. Question 28 of 40 20 MacBook Air esc F1 F2 F3 F4 $ % & 4 5 6 Q W E R tab Y A D F G # 3 © 2N
A monopolist faces the demand curve illustrated below. 12 9 -1 -2 12 13 11 15 15 1 1s 19 20 21 22 23 24 Suppose the monopolist faces a marginal cost of $5, and that there are no fixed costs. Thus, the marginal cost is equal to the average total cost in this case. Given this, what is the monopolist's profit maximizing price if it is not able to price discriminate O $5 O $8.33 O $2 O $10 $7.50 N O087654321
Which statement is correct? A monopolist will produce less than the efficient level of output. A monopolist will produce an efficient level of output. O A monopolist will produce more than the efficient level of output.
For a single-price monopolist, marginal revenue is less than price because Select one: a. the revenue gain from the last unit sold is offset by a revenue loss on the units that previously had been sold at a higher price O b. the revenue gain from the last unit sold is offset by further gains in price on units not sold at all. the price does not have to be lowered on all previous units sold. PO total revenue always decreases as output increases
If the average total cost curve is always above the demand curve of a monopolist, what can we conclude about the monopolist's performance? The monopolist will earn an economic profit. O Entry will occur, forcing the monopolist to reduce price and expand output. The monopolist will suffer economic losses. O The monopolist must be producing inefficiently.
If a monopolist with significant barriers to entry is making positive economic profit in the short run, what do we expect to happen as the market transitions to the long run? O The profit will increase since the monopolist has no competition, they can just raise the price to earn higher profits. O It will decrease as positive economic profit signals new firms to enter the market, increasing the market supply, and lowering the prevailing price. O It will increase, in the long run firms will drop out the market increasing the monopolists dominance in the marketplace. O The profit will stay the same, strong barriers to entry prevent new competition.
Question 25 The change in total revenue that results from a one-unit increase in quantity sold is marginal revenue. By this definition, the marginal revenue of a monopolist is: O Always equal to price O Above price because the firmi is a price setter O Less than price because to sell more output the firm must reduce the price on all units sold O Less than price because a monopolist is a price taker
A monopolist is chooses their price (and the associated quantity implied by their demand curve) such that the price elasticity demand could be either -0.5 or -1.2. Which of the following statements are true: O -0.5 could be profit maximising, but -1.2 could not be profit maximising O Neither price-elasticities of demand could be profit maximising O Both price elasticies of demand could be profit maximising O -1.2 could be profit maximising, but -0.5 could not be profit maximising
Suppose the table below describes the relationship between price and quantity demanded for a monopolist. Quantity 1 2 3 4 5 6 7 8 O If the marginal cost of producing each unit of output is $5, then this monopolist maximizes its profit by charging __________ per unit. O $8 $5 $3 Price $10 $9 $8 $7 $6 $5 $4 $3 $6
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