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Unformatted text preview: Pre-Test Chap 10 e18 Student: ___________________________________________________________________________ 1. If a monopolized industry should become purely competitive without any change in cost conditions: A. Both price and quantity produced will increase B. Both price and quantity produced will decrease C. Price will increase and quantity produced will decrease D. Price will decrease and quantity produced will increase 2. Refer to the above graph showing the short-run revenue curves for a monopolist. At what output level is demand inelastic? A. Q 1 B. Q 2 C. Q 3 D. Q 4 3. Which is a barrier to entry? A. Patents B. Revenue maximization C. Profit maximization D. Elastic product demand 4. One major barrier to entry under pure monopoly arises from: A. The availability of close substitutes for a product B. Ownership of essential resources C. The price taking ability of the firm D. Diseconomies of scale 5. Given a downsloping linear demand curve, when total revenue is decreasing, marginal revenue is: A. Positive and demand is elastic B. Negative and demand is elastic C. Positive and demand is inelastic D. Negative and demand is inelastic 6. Which is one of the conditions that must be realized before a seller finds that price discrimination is workable? A. The demand for the product is perfectly elastic so any price can be charged for the product B. The seller must be able to segregate buyers based on a willingness to pay C. The buyer must be able to resell the product at a higher price to other consumers D. The product must be a service because demand is more elastic for services 7. For a monopolist, at an output level of 10 units price (P) is $8. MR will be: A. > $8 and < $16 B. < $8 C. = $8 D. > $16 8. Which is not true of price discrimination? A. It exists when price differences depend critically on different buyers' evaluations of a product B. Successful price discrimination will provide the firm with more profit than if it does not discriminate C. Successful price discrimination implies that the producer can separate customers into easily identifiable groups D. Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly D....
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This note was uploaded on 05/23/2010 for the course ECON 101 taught by Professor Keep during the Spring '10 term at Glendale Community College.
- Spring '10