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Econ321 s06 steve quiz3

Econ321 s06 steve quiz3 - Economics 32 Mini-Quiz#3 Multiple...

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Unformatted text preview: . Economics 32'! Mini-Quiz #3 Multiple choice/ Circle the answer that corresponds to the most nearly correct answer: 1. At the monopolist's profit-maximizing output, the price elasticity of demand is greater than one b. less than one - c, One , d. impossible to determine without more data @ If the demand elasticity for the monopolist product is equal to 2 and marginal revenue is 10, what is the price? 9 $20 0. $10 c. $0.50 d. $5 3, Practical difficulties arise in regulating natural monopoly because - . a. the average cost pricing rule leads to losses which must be subsidized «b. price ceilings are likely to result in shortages {9 the monopoly has no incentive to hold down costs d. none of the above 4. Peak-load pricing for electricity would produce incentives a. to increase the use of electricity b. for utilities to build larger generating facilities ‘6. fer users to switch from otf-peak to peak use of electricity for users to switch from peak to offlpeak use of electricity ...
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