ECON 1BO3 - Assignment #8 - 1(Points 1 The theory of...

1.
(Points: 1) The theory of monopoly assumes that the monopoly firm
1. faces a downward-sloping supply curve that is the same as its marginal revenue curve.
2. faces a downward-sloping demand curve.
3. produces more than the perfectly competitive firm under identical demand and cost conditions.
4. produces a product for which there are many close substitutes.
5. none of the above
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2.
(Points: 1) A natural monopoly exists when
1. there are no close substitutes for a firm's product.
2. a firm is the exclusive owner of a key resource necessary to produce the firm’s product.
3. a monopolist produces a product, the main component of which is a natural resource.
4. economies of scale are so large that only one firm can survive and achieve low unit costs.
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3.
(Points: 1) Which of the following is the best example of a monopoly?
1. a local power utility
2. a wheat farmer
3. a department store
4. a fast-food restaurant
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4.
(Points: 1) For the monopoly firm that does not engage in perfect price discrimination,
1. the marginal revenue curve lies below the demand curve.
2. the marginal revenue curve and demand curve are the same.
3. the marginal revenue curve lies above the demand curve.
4. marginal revenue equals price.