PS6.pdf - Exam Name MULTIPLE CHOICE Choose the one...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Figure 15 - 4 Figure 15 - 4 shows the demand and cost curves for a monopolist. 1) Refer to Figure 15 - 4. What is the profit - maximizing/loss - minimizing output level? 1) A) 600 units B) 800 units C) 940 units D) 1,160 units 2) To be a natural monopoly a firm must 2) TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 3) To maximize profit, a monopolist will produce and sell a quantity such that for the last unit sold, marginal revenue equals marginal cost, and charges a price given by the demand curve at that output level. 3) 4) Merger guidelines developed by the Antitrust Division of the U.S. Department of Justice use four - firm concentration ratios as measures of concentration. 4) 1
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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 5) Market power refers to 5) ESSAY. Write your answer in the space provided or on a separate sheet of paper. 6) What happens to a monopoly's revenue when it sells more units of its product? MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 7) A profit maximizing monopoly's price is 7) 8) To maximize profit a monopolist will produce where 8) A) marginal revenue is equal to marginal cost. B) revenue per unit is maximized. C) demand for its product is unit elastic. D) average total cost is equal to average revenue. ESSAY. Write your answer in the space provided or on a separate sheet of paper.
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