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A monopolist maximizes profits at the output at which

A monopolist maximizes profits at the output at which

a.total revenue is at its greatest, assuming that the firm has both fixed and variable costs.

b.price equals marginal cost.

c.price exceeds marginal cost by the greatest amount.

d.none of the above

 

 

 

32.Which of the following is characteristic of the monopoly firm?

a.It produces the quantity of output at which marginal revenue equals marginal cost, MR = MC.

b.It charges a price per unit for its product that is equal to marginal cost.

c.It always earns a profit, because it is a single seller of a product.

d.a and b

e.a and c

 

 

 

33.Which of the following statements is true?

a.As a consequence of the monopoly firm producing the quantity of output at which price equals marginal cost, it is resource allocative efficient.

b.As a consequence of the perfectly competitive firm producing the quantity of output at which price equals marginal cost, it is resource allocative efficient.

c.a and b

d.none of the above

 

 

 

34.In order for a monopolist to be earning a profit, price must be greater than

a.average total cost.

b.marginal revenue.

c.total cost.

d.marginal cost.

 

 

 

35.For a monopolist, if price is above average total cost, the monopolist is

a.earning an economic profit.

b.taking an economic loss.

c.minimizing total fixed costs.

d.minimizing total variable costs.

 

 

 

36.The Townsend Acts

a.are anti-trust laws passed in the U.S. in the 1930's to limit monopoly power.

b.allow district attorneys the opportunity to plea bargain with accused criminals.

c.were British laws enacted in the 1760's that imposed taxes on products imported to the American colonies, leading (in part) to the Boston Tea Party.

d.were enacted in the late 1800's to permit regulation of natural monopolies.

 

 

 

37.The perfectly competitive firm charges a price equal to __________ while the monopolist charges a price __________.

a.marginal revenue; equal to marginal cost

b.marginal cost; greater than marginal cost

c.marginal revenue; greater than marginal revenue

d.average total cost; greater than average total cost

e.b and c

 

 

 

38.Economic rent is a payment in excess of

a.average fixed cost.

b.average variable cost.

c.opportunity cost.

d.explicit cost, but not necessarily implicit cost.

e.none of the above

 

 

 

39.Rent seeking occurs when the seller charges

a.different prices for the product it sells, and the price differences do not reflect cost differences.

b.the highest price each consumer would be willing to pay for the product rather than go without it.

c.a uniform price per unit for one specific quantity, a lower price for an additional quantity, and so on.

d.a and c

e.none of the above

 

 

 

40.The seller of good X sells 1,000 units of the good.  Each unit is being sold for the highest price each consumer is willing to pay for the good. The seller practices

a.second-degree price discrimination.

b.third-degree price discrimination.

c.perfect price discrimination.

d.marginal revenue pricing.

e.rent seeking.

Dec 09 2019 View more View Less

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