C7_Quiz - Multiple Choice Quiz

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Multiple Choice Quiz (See related pages) 1 The demand curve facing a monopoly: A) is equal to the industry demand curve. B) is horizontal at the going market price. C) is steeper than the industry demand curve. D) is flatter than the industry demand curve. 2 For a monopolist: A) MR < P. B) MR < average revenue. C) MR declines as output increases. D) All of the above are true. 3 A monopolist maximizes profit by producing at the output for which: A) marginal cost = marginal revenue. B) (marginal revenue minus marginal cost) is at its maximum. C) marginal cost = average revenue. D) (marginal cost minus marginal revenue) is at its maximum. 4 If your firm is a monopoly: A) it will always earn positive economic profit. B) it will never earn positive economic profit. C) it may earn positive economic profit, zero economic profit, or suffer losses depending on demand conditions. D) None of the above is true. 5 If a firm converts a previously competitive industry into a monopoly without any changes in the cost curves: A) it will increase output and price to generate more profit. B) it will reduce output and raise price to generate more profit. C) it will keep output the same but increase price to generate more profit. D) it will reduce price and increase output to keep potential competitors from entering the industry. 6 Monopolies have some undesirable characteristics; however: A) they may have an offsetting benefit due to their greater financial resources for conducting valuable research and
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This note was uploaded on 01/28/2011 for the course PAS 2201 taught by Professor R.nair during the Spring '10 term at St. John's.

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C7_Quiz - Multiple Choice Quiz

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