Questions:
Question 1. A monopolist faces
a perfectly elastic demand curve.
a portion of the market demand curve.
an upward-sloping demand curve.
no demand curve, because demand is not important to the monopolist.
the market demand curve.s
Question 2. If a firm is making an economic profit, then
the factors of production are being paid their opportunity costs.
there will be no change in the number of firms if the industry is perfectly competitive.
the factors of production are being paid less than their opportunity costs.
the factors of production are being paid more than their opportunity costs.
the firm will exit the industry.
Question 3. Which of the following is NOT an essential characteristic of monopolistic competition?
a small number of sellers
differentiated products
relatively easy entry
short-run profits
a very elastic demand curve
Question 4. A monopolist will try to operate
where marginal cost equals marginal revenue.
in the inelastic range of the demand curve.
where average revenue equals marginal revenue.
at the highest price on the demand curve.
Question 5. For a perfectly competitive firm, the demand curve is
the marginal revenue curve.
perfectly inelastic.
always equal to marginal cost.
the same as the market demand curve.
Question 6. Retail outlets operate in which of the following market structures?
perfect competition
monopolistic competition
oligopoly
monopoly
oligopsony
Question 7. If the demand curve of a monopolist is in the inelastic range, then
total revenue will fall if price increases.
total revenue will be unchanged if price increases.
total revenue will rise if price increases.
total supply will increase by an equal amount if demand increases.
price will be unchanged if total revenue increases.
Question 8. Along a downward-sloping monopoly demand curve,
marginal revenue is greater than price.
elasticity of demand is constant.
marginal revenue decreases when price decreases.
marginal revenue is equal to zero when price is equal to zero.
Question 9. At the other end of the market continuum from perfect competition is
the corporation.
oligopoly.
the partnership.
monopsony.
monopoly.
Question 10. When P = AR = MR = AC = MC,
economic profits are positive.
economic profits are zero.
economic profits are negative.
normal profits are zero.
normal profits are negative.