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Ch10 - CHAPTER 10 Market Power Monopoly and Monopsony...

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CHAPTER 10 Market Power: Monopoly and Monopsony MULTIPLE CHOICE Section 10.1 easy 1. When the demand curve is downward sloping, marginal revenue is a. equal to price. b. equal to average revenue. c. less than price. d. more than price. easy 2. For the monopolist shown below, the profit maximizing level of output is: 108
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CHAPTER 10 TEST BANK MARKET POWER: MONOPOLY AND MONOPSONY SIXTH EDITION easy 3. How much profit will the monopolist whose cost and demand curves are shown below earn at output Q1? easy 4. Which of the following is NOT true regarding monopoly? easy 5. Which of the following is true at the output level where P=MC? a. The monopolist is maximizing profit. b. The monopolist is not maximizing profit and should increase output. c. The monopolist is not maximizing profit and should decrease output. d. The monopolist is earning a positive profit. easy 6. Compared to the equilibrium price and quantity sold in a competitive market, a monopolist will charge a ______________ price and sell a ______________ quantity. 109
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TEST BANK CHAPTER 10 SIXTH EDITION MARKET POWER: MONOPOLY AND MONOPSONY easy 7. Assume that a profit maximizing monopolist is producing a quantity such that marginal revenue exceeds marginal cost. We can conclude that the easy 8. To find the profit maximizing level of output, a firm finds the output level where easy 9. As the manager of a firm you calculate the marginal revenue is $152 and marginal cost is $200. You should a. expand output. b. do nothing without information about your fixed costs. c. reduce output until marginal revenue equals marginal cost. d. expand output until marginal revenue equals zero. e. reduce output beyond the level where marginal revenue equals zero. easy
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